Gati, a distribution and supply chain solutions provider, on Tuesday announced plans to issue fresh foreign currency convertible bonds (FCCBs) to avoid default on the conversion of existing FCCBs, which were due for redemption on December 6.
The company has taken up restructuring programme including selling-off a majority stake in its loss-making shipping division and roping in an overseas partner to take up global supply chain contracts. “We hope to finalise the two deals by June 2012”, Managing Director and CEO of the company Mahendra Agarwal told mediapersons here.
Triggered by concerns among investors on whether the company would default on its existing FCCBs the Gati stocks took a battering on the bourses for the last two days. The new FCCBs would be issued for $22 million, which would be adequate to redeem the old FCCBs worth $15 million and an interest of $7 million.
Mr. Agarwal sounded confident that there would be no default on their FCCBs' commitment as they had been restructured with Goldman Sachs.
The new FCCBs involved an interest of about 5.5 per cent.
Hit by the global economic meltdown the shipping division of the company incurred a loss of Rs.9 crore in the quarter ended September 30, 2011.
However, the profit before tax in the distribution business has risen by 73 per cent to Rs.16.3 crore with total income going up by 15.3 per cent to Rs.236.40 crore.
