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Our Bureau

Kolkata, Sept. 22

Blackstone is converting around 11 lakh fully and compulsorily convertible debenture (FCCDs) of Allcargo Logistics Global (AGL) this month at its pre-set price of Rs 934 a share.

But the private equity has decided the lowest exercise price of Rs 934 in the band set for conversion of 15.13 lakh warrants instead of applicable price of Rs 1,284 a share.

Blackstone, which has board berth in AGL, expressed its intention to convert the warrants into equity shares at an exercise price of Rs 934 a share to the management. Warrants are due for conversion on September 26.

A top company official told Buiness Line that conversion of the two instruments would take Blackstone’s holding in the company’s enhanced paid-up capital to 14.99 per cent from 5.26 per cent. The current paid-up capital is Rs 22.36 crore. After the conversion, it would increase to a little over Rs 25 crore. In March last year, AGL had issued 15,13,514 warrants, equally convertible at a price, linked to the consolidated EBIDTA during 2008, ranging between Rs 934 and Rs 1,284 a warrant. According to the terms, in case the AGL EBIDTA in financial year to December 31, 2008, was above Rs 210 crore, then the conversion price should be Rs 1,284 a share. Despite achieving the condition, AGL has agreed to accept the revised exercise price. The board of AGL, in view of the prevailing market conditions, the economic slowdown and the funding requirement of the company, accepted the revised exercise price last week.

The acceptance of the revised exercise price, however, would require amendments in the investment agreements and in the articles of association of the company. AGL will seek shareholders’ approval of amendment in the articles at an extraordinary general meeting on October 15, the company has said to the stock exchanges.

The company had issued also 10,81,081 FCCDs with a coupon tag of 6 per cent to Blackstone in March 2008. These FCCDs are also set for conversion by the end of September. Mr Akhilesh Gupta, India head of Blackstone, is on the board of AGL.

The AGL shares moved up 7.26 per cent to close at Rs 887.85 on the BSE.

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