Educomp Solutions surges on tie up for USD 155 mn funds to repay FCCB of USD 78.5 mn

A meeting of the Board of Directors of Educomp Solutions Ltd have approved a comprehensive financing package of USD 155 million.

A cumulative amount of $70 mn under External Commercial Borrowings comprising $30 mn from IFC, a member of the World Bank Group and $40 mn from Societe De Promotion Et De Participation Pour La Cooperation Economique (Proparco, a French development finance institution), under an 8.5 years facility.

$10 mn under FCCB from IFC convertible into equity shares of the company at a premium of 40% to the floor price as per SEBI formula.

Preferential allotment of equity shares to IFC, Proparco and Mount Kellett upto an aggregated amount not exceeding $50 mn at Rs.149.16 per share (a premium of 10% to the floor price as per SEBI formula).

Preferential allotment of equity shares and warrants to Promoter group upto an aggregated amount not exceeding $55 mn, in a combination of straight equity ($15 mn) and warrants ($40 mn), at a price of Rs.193.74 per share, representing a premium of approximately 44% to the closing price of the equity shares as on June 18, 2012.

The decision of the Board for the above fund raising proposal is subject to approval of shareholders. Out of the above mentioned amount of $155 mn, while approximately $111 mn is proposed to be utilized for existing FCCB redemption (principal of $78.5 mn and balance as redemption premium), the balance would be utilized towards capex and strengthening the balance sheet of the company. The components of the financing package are expected to close simultaneously before the FCCB redemption date.

The Educomp Solutions Ltd stock was trading at Rs.150.60, up by Rs.13.55 or 9.89%. The stock hit an intraday high of Rs.152.70 and low of Rs.138.50.

The total traded quantity was 20.42 lakhs compared to 2 week average of 4.76 lakhs.

Source : Equity Bulls

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