Morepen Laboratories inks pact with Avenue
Morepen Laboratories inks pact with Avenue Morepen Laboratories entered into a pact with G L India Mauritius III, a subsidiary of Avenue Capital Group (Investor), for subscribing equity shares and naked warrant to the tune of 14.99% and 5% respectively of the equity share capital of the company.
The company is planning to issue and allot equity shares and naked warrants convertible into equity shares in due course on the receipt of subscription money and after necessary formalities.
As per share subscription agreement signed on Sep. 20, 2007, Avenue Capital is subscribing to 38.53 million equity shares of Rs 2 each at premium of Rs 18 a share and will be infusing Rs 770.6 million in the company.
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In addition to this, Avenue Capital is also subscribing to naked warrants to the extent of 5% of the enhanced capital base and will be investing a total of Rs 270.4 million against these warrants.
As per the terms of agreement Avenue Capital through its subsidiary G L India, Mauritius will pay 10% money on subscription and the balance 90% is to be paid within 18 months of signing the term sheet.
The promoters are also fulfilling their commitment of subscribing to warrants by way of infusing fresh capital which are to be converted into 100 million equity shares, amounting to Rs 600 million. The total equity base of the company will go upto Rs 741.2 million comprising of 370.6 million shares of Rs 2 each. This will include 2.03% equity (751.7 million shares) issued to the Banks.
After subscription of these warrants the promoter`s stake in the company will stand at 46%, G L India Mauritius (Avenue Capital) will hold 14% and the public holding will be 38% in the company.
The entire Rs 1,400 million being brought in by the company as fresh capital will be utilized for repayment to banks under Corporate Debt Restructuring (CDR) scheme for which a settlement has already been arrived at.
As a part settlement of debt, the company has already issued preferential capital of Rs 1,030 million to the Banks which will have an option to be converted into equity after a period of seven years. Post this settlement, the company will not have any pending liabilities with banks and will have a serviceable debt of only Rs 723.9 million, bearing an average interest at 8.25% p.a.
As per the terms of the agreement the repayment of this loan is over a period of 10 years with a moratorium of 2 years. The interest servicing will be gradual with as low as 2% in the first year and 18% in the last two years. In addition, the company will be carrying zero coupon bonds of Rs 640 million repayable in 9th and 10th year.
Post settlement with banks, the company will start working on a scheme for settlement with fixed deposit receipt (FDR) holders.
Shares of the company gained Rs 0.90, or 5.11%, to trade at Rs 18.50. The total volume of shares traded was 701,348 at the BSE.(11.11 a.m,Thursday ).
