KSL & Industries has settled a court dispute with holders of its foreign currency convertible bonds (FCCBs).
Days before it was required to reply to a winding-up petition in the Bombay High Court from these bondholders, KSL bought back FCCBs worth $90 million (around Rs 500 crore).
“After negotiations, the company bought back the bonds and settled with the bond holders two days back. Following this, the trustee has withdrawn the winding-up case against the company,” a bond holder said.
KSL had defaulted on repayment on these FCCBs, due for redemption on May 19. Following this, Bank of New York Mellon, trustee for the bondholders, moved the winding-up petition against KSL.
The move allows the company to go ahead on its corporate debt restructuring (CDR) plan with a consortium of banks. KSL is seeking to restructure loans worth Rs 700 crore due to state-owned lenders, including Punjab National Bank, Union Bank of India and UCO Bank.
This is part of the Rs 2,811-crore of loans sought to be restructured by the Tayal group.
Earlier, the court had said any such CDR process should be intimated to the bond holders in advance and would be without prejudice to their case.
The company was supposed to file its response on the petition by today. It had also been directed by the court to give details of divestment of a key real estate subsidiary, named Reward Real Estate.
In a filing on May 26, KSL had said it “is considering options to restructure the outstanding bonds” and that it “is in the process of approaching the Reserve Bank of India” to conduct such restructuring.
However, bond holders told the court they had not agreed to any such restructuring. Pravin Kumar Tayal, group patriarch, and son, Saurabh Tayal, were not available for comment.
Shares of KSL fell seven per cent on Thursday, to close at Rs 54.05.