Welspun Corp has bought back foreign currency convertible bonds (FCCBs) worth Rs 200 crore ($45 million) at a discount of 8 per cent.
The company said, “This buyback was funded by new foreign currency loan with an average maturity of 5 years. After accounting for this repurchase convertible bond worth Rs (550 crore) $105.9 million remain outstanding and due for maturity by Oct 2014.”
In December last year, the company had issued a tender to buy back FCCBs worth Rs 700 crore ($150 million) which are due in 2014. The buy back at that time could not go ahead as the lenders were not willing to agree to the discount Welspun was asking.
“Besides reducing the potential equity dilution, bond repurchase further reposes the confidence in the business model and will boost the profitability going forward,” Welspun said.
On October 16, the company again announced its intentions to buy back the FCCBs in the window starting October 17 and ending on October 23, 2012. It had intended to buy a minimum of Rs 100 crore worth of FCCBs but managed to repurchase FCCBs worth double the amount.
In 2009, Welspun had raised Rs 700 crore through FCCBs and another Rs 80-100 crore through a QIP route.
The company had raised this money to fund its pipe projects worth Rs 550 crore and to deleverage its balance sheet.
The FCCBs are listed on the Singapore Stock Exchange.
