Conversion of loan to equity

Pooja (CS) (35 Points)

21 December 2014  

A Private Company had taken unsecured loan from a Director in the month of July (It had not entered into any agreement with the Director). Now, the Company wants to convert the unsecured loan to equity. So, in what way the Company can convert the unsecured loan to equity and allot the shares to the Director? Do they have to follow private placement for conversion??