Shah Metacorp Limited has informed the Exchange about issue of Securities
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Shah Metacorp Limited's board has approved a Rights Issue of fully paid-up equity shares (face value Re. 1) for an amount not exceeding Rs. 50 Crore, offered to existing eligible shareholders. The issue price, entitlement ratio and record date are yet to be decided. Separately, the board approved investing up to USD 100,000 (about 50% stake) in Shah Metacorp Holdings USA INC, a newly incorporated US subsidiary, and a related party working capital loan of up to Rs. 100 Crore to this US entity. The board also modified the existing loan agreement with promoter-director Mona Viral Shah (loan size up to Rs. 75 Crore) to add a clause allowing the loan to be converted into equity shares under the proposed Rights Issue, subject to shareholder approval via postal ballot. Mona Shah currently holds 12.04% of the company. A postal ballot has been scheduled for shareholder approval of these related party transactions.
Existing shareholders will get a chance to subscribe to the Rights Issue and maintain their holdings, but the proposed conversion of a large promoter loan into equity could dilute shareholding and potentially alter control dynamics. The debt-to-equity ratio may improve if the loan is converted, but the simultaneous Rs. 100 Crore working capital loan to the new US subsidiary adds fresh related-party exposure for a business that has not yet started operations.