Media Release: Eraaya Lifespaces initiates FCCB Exit: Pursues amicable resolution including cancellation-rescission and full repayment amid legal impossibility, fiduciary breach, frustration, ....
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Eraaya Lifespaces announced its Board has authorized pursuing an amicable exit from the USD 120 million FCCB issuance made in August 2024 to fund the Ebix Inc. acquisition. The company alleges it only received USD 80 million of the USD 120 million raised, with Elara Capital PLC and bondholders withholding the remaining USD 40 million. The Board cited alleged conflict of interest (Elara Capital acted as financial advisor while its related entity Oyster Bay subscribed to the FCCBs), contractual frustration, misrepresentations, and illegality under the Companies Act, 2013. The NCLT New Delhi has a status quo order in place since February 13, 2025 in a Section 241/244 petition by public shareholders challenging the Offering Circular, and the matter has been escalated to NCLAT. The Advisory Board, including former SEBI Chairman G.N. Bajpai and former Enforcement Directorate chief Karnal Singh, endorsed the move. The company stated no bona fide investor will suffer economic loss and reserves all legal rights including damages claims.
This creates significant uncertainty around the company's capital structure and ongoing NCLT/NCLAT litigation, which may weigh on the stock. Shareholders should brace for potential volatility as the FCCB unwind, repayment mechanics, and parallel legal proceedings unfold.