3i Infotech up on debt realignment

3i Infotech had a Board meeting yesterday and it made some important announcements. The market is thrilled that it has decided to go for the Debt Realignment Scheme (DRS) and this includes waiver of interest upto March 31, 2016. It also includes conversion of around 35% of the principal component of the debt to non-convertible redeemable preference shares. The company plans to convert 40% of the debt into equity shares of Rs.10 face value and balance 25% is to be retained as loan, with an elongated repayment schedule.

The Board has also approved restructuring of FCCBs and this includes waiver of accrued and unpaid interest on existing bonds up to 31st March 2016. It also approved waiver of portion of the principal amount of the existing bonds. The plan also includes conversion of a portion of the principal amount of the existing bonds in to equity shares at a revised conversion price and exchange a portion of the principal amount of existing bonds with new FCCBs to be issued for a fixed tenure and interest rate.

Naturally, all this is subject to approvals coming in from shareholders, bondholders, RBI stock exchanges and other regulatory bodies.

The stock price seems assured of all approvals and that is reflected in the over 12% rise in this penny stock; currently at Rs.6.