M&M plans early conversion/redemption of FCCBs worth $141.20 million

Mahindra & Mahindra Ltd has advanced the last date for conversion of its outstanding foreign currency convertible bonds (FCCBs) into shares / GDRs to 29 October 2010 from the due date of 14 April 2011.

M&M will convert the $141.20 million FCCBs into GDRs/ shares latest by 29 October and redeem outstanding FCCBs after conversion, if any, on 8 November, the company said in a filing with the Bombay Stock Exchange.

The company had issued FCCBs having a face value of $100,000 each, of a total $200 million, on 13 April 2006. The bonds carried zero coupon and were due for redemption, with a premium of 28.03 per cent, on 14 April 2011, if not earlier converted to share earlier by the bondholders.

The FCCBs are to be converted into shares at a fixed exchange rate of Rs44.42 a dollar.

The company has the right to recall the bond after two years of issue if the share price is greater than 120 per cent of the conversion price for a continuous period of 30 trading days. The company's shares have been trading constantly higher than 120 per cent for the last 12 weeks and are currently ruling at around Rs725.70.

The company has issued a redemption notice to the bondholders by exercising this right under the terms and conditions of the issue. The bondholders enjoy a right to convert into shares/GDRs at all times and it is expected that most of the bondholders would find it economically beneficial also, M&M said in its filing.