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Journalism of Courage
Lloyds Steel Industries Ltd — a major defaulter of bank loans — has decided to opt for conversion of institutional loan into equity. The company will issue redeemable preference shares (RPS) worth Rs 234.98 crore on private placement basis to financial institutions against part conversion of its existing loan.
In a significant concession allowed by FIs, the redemption will be after 11 years. These RPS would be redeemed with a premium of 11.5 per cent in six annual instalments commencing from the financial year 2016 and will not carry any right to dividend. The FIs, led by IDBI, are thus taking a hit to accommodate the defaulter.
‘‘The board in its meeting held on Monday, has approved issue of RPS having a face value of Rs 10 per share at par of Rs 234.980 crore on private placement basis to FIs against part conversion of existing loan as per restructuring of the company’s debt,’’ the company informed BSE on Tuesday.
