Sterling Biotech was locked at 20% upper circuit at Rs 8.89 at 15:16 IST on BSE after the company's bond holders approved a resolution for exchange and substitution of the existing bonds with the Zero Coupon Convertible Bonds due 2018.
The announcement was made after market hours on Wednesday, 20 November 2013.
Meanwhile, the S&P BSE Sensex was down 404.02 points or 1.96% at 20,231.11.
The stock spurted on heavy volumes. On BSE, 36.44 lakh shares were traded in the counter as against average daily volume of 2.02 lakh shares traded in the past two weeks.
The stock hit a low of Rs 7.60 so far during the day.
Sterling Biotech after trading hours on Wednesday, 20 November 2013, said that at the meeting of the holders of the existing bonds held on Wednesday, 20 November 2013, the bond holders have passed and approved, amongst others, the extraordinary resolution to approve exchange and substitution of the existing bonds with and for the Zero Coupon Convertible Bonds due 2018 and the terms and conditions thereof. The bond holders have also agreed and approved that the conversion price of the Bonds due 2018 shall be Rs 60 per share, subject to Reserve Bank of India, Foreign Investment Promotion Board and such other regulatory approvals, if any, as may be required. The bond holders have also approved and agreed to suspend all litigations in India and UK till January 2014 and they had also agreed to withdraw the litigations in India and UK on completion of the exchange and substitution of the existing bonds with and for the Zero Coupon Convertible Bonds due 2018, Sterling Biotech said after trading hours on Wednesday, 20 November 2013.
Sterling Biotech had on 30 May 2013 said that in respect of the $250,000,000 Zero Coupon Convertible Bonds due 2012 convertible into ordinary shares or global depository receipts representing ordinary shares of the company of which $134,500,000 in principal amount remain outstanding, to enable a consensual restructuring of the bonds to be agreed and implemented, a meeting of the bondholders was convened by the Trustee on 30 May 2013 at Hong Kong wherein an extraordinary resolution was passed suspending all litigations in India and UK.
Sterling Biotech reported a net loss of Rs 99.38 crore in Q3 September 2013, higher than net loss of Rs 76.67 crore in Q3 September 2012. Net sales declined 18.5% to Rs 161.35 crore in Q3 September 2013 over Q3 September 2012.
Sterling Biotech's core business is the manufacture of gelatin for pharmaceutical and edible uses.
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