Instrument to raise Capital (Other than Equity) for a Pvt.

This query is : Resolved

C.S. Rajesh Pillai (Querist)
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09 September 2009 Hi,

We have a Private Ltd. Company and have few Investors in hand, who are ready to invest about Rs. 300 crores with us for a period of, say 15 to 20 Years. They are ready for even 0% OFCDs.

- We do not want to issue equity shares

- Pls. guide us on which instrument we should raise such capital

Whether we can raise 0% OFCDs (Optionally Fully Convertible Debentures) for a period of 15 to 20 years?

Suppose we issue preference shares, we have apprehension about:
1)dividend
2)maturity
3)redeemable / irredeemable

Is there any other instruments prevelant in the market to raise funds in large, scale, provided the investors are ready to place money.

Pls. consider this on priority

best regards,

Rajesh Pillai

M Prabhakar Menon

M Prabhakar Menon (Expert)
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09 September 2009 If u raise it as a secured loan then u can consider issue of debentures in different varieties ; as unsecured loans u may be have to watch out for the provsions of S 58A of The Companies Act 1956. and the rules thereunder.But as loans u will have to take your bankers into confidence first as their interests can be affected. Issue of redemmable preference shares can be an option. If its foreign exchange then with or without repatriation rights will require different approach. In any case the sources of the money should be able to stand income tax scrutiny.

C.S. Rajesh Pillai

C.S. Rajesh Pillai (Querist)
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09 September 2009 Thank U for the reply.

Source of money is from known sources only.

If we go for Preference shares, Authorised Capital is to be increased and accordingly stamp duty, registration fee etc. will come in to picture.

What about the redemption of pref. shares?

What is your view about issuing 0% Optionally Fully Convertible Debentures?

Other views are also solicited.

We have to finalise this issue on a priority basis.

pls. revert.

regards.

Rajesh

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C.S. Rajesh Pillai

C.S. Rajesh Pillai (Querist)
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09 September 2009 Hi

Further to our discussion, pls. tell me whether Preference shares can be issued on a premium

Rajesh

Guest

Guest (Expert)

05 October 2009 yes, prefrence share can be issued at premium

Guest

Guest (Expert)

05 October 2009 O% Interest Non Convertible Debenture is the Most Appropriate Medium to raise money.