Castex Tech hits 5% UC
Castex Technologies has been breaching the 5% upper circuit consistently since 13th June. Today also it hit the UC at Rs.6.78 with some 3 times jump in volumes.
A part of the beleaguered Amtek group, the stock is up today after the company announced yesterday after market closure that Citicorp International has withdrawn legal proceedings against the company. This was filed on behalf of bondholders of US$70 million 2.5% bonds in the Commercial Court in London.Bind hoders had alleged that the company had manipulated stock to force conversion.
This brings to a final conclusion (subject to payment of Castex's legal costs] the litigation instituted by Citicorp International Limited in respect of the validity of the conversion notice and the allegations of share price manipulation in respect of these bonds.
The discontinuance follows orders of the Commercial Court in favour of Castex on February 24, 2016 and, in respect of US$130 million 6% bonds on March 04, 2016 in the proceedings instituted by Citicorp International.
Last year, the stock price did have questionable volatile moves. As per the FCCB terms, for the mandatory conversion to happen, for the first tranche of bonds with 6% coupon rate, the stock price of Castex had to go above Rs.171.08 for 30 days straight. The second tranche, with 2.5% coupon rate, had to exceed Rs.153.36. And strangely, it was seen in Castex that the stock price all of a sudden started spiking up and rose over Rs.171.80 and even rose to hit a high of Rs.361.85 and stayed above the threshold limit for more than 30 days. After that, the stock price slipped consistently for 29 days; in fact it was hitting the 5% lower circuit each day.
It is this strange behavior which has elicited the legal proceedings and curiously enough, the London court seems to have ruled in favor of Castex.