Allotment of non-convertible, cumulative, non-participating, redeemable preference shares on a private placement basis
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The Board of Piccadily Sugar & Allied Industries approved the allotment of 1 crore non-convertible, cumulative, non-participating, redeemable preference shares (NCRPS) on a private placement basis, for an aggregate value not exceeding Rs. 10 crore. The shares are priced at Rs. 10 each (face value) and carry a 5% per annum cumulative dividend, with a redemption period of up to 20 years. The sole allottee is Piccadily Agro Industries Limited, a promoter group entity, and the consideration is non-cash — specifically settlement of existing debt owed by the company. The NCRPS will not be listed on any stock exchange and carry no voting rights.
This is a debt-to-equity-like restructuring where the promoter group is converting existing debt into preference shares, which eases the company's repayment burden but adds a cumulative dividend obligation. For shareholders, the promoter group is strengthening its claim on the company (priority over equity in dividends and winding up) while existing equity holders face no dilution since the NCRPS are not convertible into equity shares.