Jubilant FCCB buyback gets poor response
Noida based chemicals and drug maker Jubilant Organosys failed to witness good response to its buy back offer for all its outstanding foreign currency convertible bonds
(FCCBs) worth $241 million. The firm said, in a filing before Bombay Stock Exchange, that it would buy FCCBs worth $3 million due in 2010 with total cash of $2.55 million.
The firm received bids worth $48 million only for buy back shares via FCCB tender offer.
Ranjit Kapadia, head of Life Science Research at Prabhudas Liladhar, said, "Jubilant's tender offer is much below the conversion price and that is the reason there are not many takers." Mr. Kapadia further added that more buyback by company would depend over the response of investors, reluctant to invest due to uncertainty in the financial market.
The firm offered discount of 42.6 per cent for FCCBs maturing in May 2010 and 39.6 per cent for those shares maturing in May 2011. However, the offer failed to yield the perceived results due to lukewarm response from investors.