IRCON’s subsidiary to issue hybrid security OCDs

As per Shareholder Agreement, IRPL will issue a hybrid Securities to IRCON in the form of Optionally Convertible Debenture (OCDS).

IRCON’s subsidiary to issue hybrid security OCDs

IRPL the arm of IRCON, has been incorporated to undertake the object of Setting up of 500 MW Grid Connected Solar Power Plant under the Central Public Sector Undertaking (CPSU) Scheme Phase-II (Government Producer Scheme)  floated by Indian Renewable Energy Development Authority.

The investee Company was incorporated as a subsidiary of IRCON and Joint Venture Company with Ayana Renewable Power Private Limited (Ayana) having equity shareholding of IRCON and Ayana in the ratio of 76:24.

 As per Shareholder Agreement, IRPL will issue hybrid Securities to IRCON in the form of Optionally Convertible Debenture (OCDS).

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The silent features of OCDs are as follows:

(i) The redemption of OCDs shall be done at par value.

(ii) The rate of Interest will be 14% p.a. and interest shall be payable only if IRPL has distributable profits else interest will be accumulated.

(iii) Interest payable shall remain subordinate to interest and principal payment of senior loans.

(iv) The OCDs will be unsecured

(v) The promoters shall have a right but not obligation to convert the Hybrid Securities into equity shares any time after the receipt of 2nd tranches of VGF.

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The tenure of the OCDs shall be 20 years from the date of issuance (Fixed Terms) which may be extended (subject to applicable Laws).

The cost of acquisition at which the shares are acquired needs the Investment of additional funds not exceeding Rs.88.92 Crore consisting of 8,89,20,000 OCDs of Rs.10/- each, towards 24% of the total value of OCDs issued by IRPL.

As of date, IRCON holds 76% and Ayana holds 24% of the paid-up equity share capital of IRPL.  On allotment of OCDs by IRPL, IRCON, and Ayana will hold OCDs in the ratio of 24:76 respectively.  Post issue of OCDs, the equity holding of IRCON will remain the same i.e. 76% of the paid-up equity share capital of IRPL.  

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