The FCCB Crisis

Bar & Bench February 16 2012

Niyati J. Mehta of J. Sagar Associates discusses FCCB crisis and the various options available with the issuers to restructure or redeem their outstanding FCCBs.

By Niyati J. Mehta

FCCBs are bonds with a fixed maturity period issued by Indian companies to foreign investors. The bond holders are given the option to convert the bonds into shares of the issuer company at the time of maturity at a pre-decided price. Until they are converted to shares, FCCBs constitute debt of the company.

FCCBs caught the fancy of India Inc. as innovative hybrid instruments to access international markets . . .

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