Tulip Telecom has locked down circuit of 5% at Rs 77.25 for second day in a row on the Bombay Stock Exchange (BSE). The stock of telecom services provider is under pressure as company yet to tie-up funds for redemption of foreign currency convertible bonds (FCCBs). The stock has underperformed the market by falling 28% in past one month as compared to 1% gain in benchmark Sensex.
Over the last few weeks, the company has made significant progress in its fund raising exercise through various instruments and internal accruals for redemption of outstanding FCCBs.
The company had issued $150 million bonds in June 2007, which were due for redemption on August 26, 2012. The company had bought back a portion of the bonds during 2009 and as on August 26, 2012, the aggregate principle amount of bonds outstanding is $97 million, which represents redemption obligations of $140.17 million.
The company had sought extension from investors till September 10, 2012 to honor its commitment towards the same. The FCCBs are overdue for repayment and no negotiations have been held with the investors for extension of redemption date.
A combined 46,109 shares have changed hands on the counter in morning deals and there are pending sell orders for 468,100 shares on the BSE and NSE.
