Allotment of Unlisted Preference Shares
Awaiting price reaction for this filing.
The board approved allotment of the first tranche of 23,00,000 unlisted non-cumulative redeemable preference shares at INR 100 each (0.01% coupon), aggregating to INR 23 crore, to Finquest Financial Solutions Private Limited. Finquest is the same entity that originally filed the insolvency petition against the company, suggesting this allotment is linked to the resolution plan approved by NCLT in March 2023. The board also approved delayed consolidated audited financial results for FY21, FY22, and FY23, all carrying modified opinions from auditors, including a disclaimer of opinion on FY21 due to going concern uncertainty, unconfirmed balances, accounting system migration issues, and unaudited subsidiary financials. Additionally, Mr. Alok Prakash (28 years experience in paper/textile, previously at Century Pulp & Paper) was appointed as CEO, and M/s Todarwal & Todarwal LLP was appointed as internal auditor for FY24-25 and FY25-26.
The nominal 0.01% coupon on these preference shares to the original insolvency petitioner suggests this is part of debt resolution restructuring rather than genuine capital raising, and existing shareholders should be cautious. The auditors' repeated modified opinions and going concern uncertainty signal that the company remains financially fragile even after the NCLT-approved resolution plan.