The Reserve Bank of India (RBI) has extended the last date for companies to complete the buyback of Foreign Currency Convertible Bonds (FCCB), a kind of overseas debt, by nine months to December 31, 2009.
"It has been decided to extend the date for completing the entire procedure for buyback of FCCBs from March 31, 2009 to December 31, 2009," the Reserve Bank said in a statement.
The extension of buyback date is expected to have a positive impact on the companies which want to opt for the buyback, said global financial consultancy firm Ernst & Young.
"The move is definitely positive. They (companies) had bought these FCCBs at a lower price and I don't think for 8-9 months the markets are not going to perk up. Now prices are lower so the companies can restructure their other liabilities in the time being," Ernst & Young Partner Vishal Malhotra said.
At present, it is beneficial for the companies to buy back FCCBs as at the time of issuing these bonds they had done it at higher prices.
In fact, recently some companies, including Jubliant Organosys, Moser Baer, Mahindra and Mahindra and Reliance Communications announced buyback of FCCBs.