Pantaloon shares convert to equity

Friday, 19 August 2011

The directors of Pantaloon Retail have approved the conversion of nearly 63,47,635 -- 0.01per cent Compulsorily Convertible Preference Shares (CCPs) of Rs 100 each into 63,47,635 equity shares of the face value of Rs 2 each aggregating Rs 1,26,95,270. The conversion has been done as per terms of issue of the CCPs. Further, upon conversion of the 63,47,635 CCPs all CCPs issued in 2010 have been converted and there is no outstanding CCPs pending for conversion. Consequently, the paid-up capital of the company has increased from Rs 43,41,43,382 to Rs 44,68,38,652 comprising 20,74,90,174 equity shares of Rs 2 each and 1,52,29,152 Class B (Series 1) shares of Rs 2 each.

Compulsorily convertible preference shares are those that have to be converted into ordinary shares after a predetermined date. Convertibles are increasingly becoming the preferred investment instrument for private equity (PE) firms. PE investors link the time of conversion to the company’s performance. This essentially means that the shares get converted only after the company achieves the promised growth. If the milestones are not achieved, then the PE firm reserves its right to increase the stake.

Related News