Mumbai, Sept. 2: ICICI Bank has acquired 12.65 per cent in Himachal Futuristic Communications (HFCL) through a loan-conversion triggered by repayment defaults.
In a letter to stock exchanges, the bank said it has secured 3.6 crore shares, which represent 12.65 per cent of HFCL’s equity, by converting its loans into equity.
“The company defaulted on repayment and the loan agreement provided for conversion into equity shares on default. The shares were taken on August 27,” ICICI Bank said in its communication to National Stock Exchange (NSE).
The HFCL board had in July cleared the allotment of 3.6 crore shares to the bank in lieu of unpaid loans worth Rs 36 crore.
Today’s announcement set the company’s share afire. It opened at Rs 27.20, hit an intra-day high of Rs 29.25 and closed at Rs 28.55 in a gain of 7 per cent over its previous close. ICICI Bank jumped Rs 3.15 to Rs 187.20.
HFCL is in the midst of a restructuring plan aimed at improving efficiency and turning back to its core competence of telecom gear manufacturing, turnkey services and research & development (R&D). It had written to exchanges earlier that the revamp would seek to bring its overall capital employed in line with its core business and bolster shareholder value sharply.
The company planned to appoint a consultant who would be asked to submit its recommendation to the board.
For the first quarter ended June 30, HFCL posted a net profit of Rs 14.53 crore compared with Rs 10.32 crore in the corresponding period last year. Total income stood at Rs 218.7 crore, up from Rs 207.64 crore a year ago.