CG Power at 5% UC

CG Power, which had closed on Friday at Rs.34.30, opened today at Rs.35.40 and soon hit the 5% LC of the day at Rs.36.

The stock has reacted positively to the news that the lenders have accepted a one-time settlement and restructuring of funded facilities and guaranteed debt in accordance with the terms of the offer made by Tube Investments. In August, Tube Investments agreed to invest Rs.700 crore in CG Power for a 56.61% stake.

As per the terms:

1: Compromise settlement by undertaking an upfront payment of Rs.650 crore to Lenders.

2: Conversion of Rs. 200 crore of fund-based facilities into unrated, unsecured, unlisted, non-convertible debentures having a tenure of 5-years to be issued by the company to the Lenders.

3: Resolution proposal envisages that Lenders shall be paid from the proceeds from sale of the property, “CG House” situated at Worli, Mumbai on best efforts and as is where is basis, within a period of 5-years from the date of the Master Implementation cum Compromise Settlement Agreement.

4: Transfer / replacement of non-fund based facilities of the Lenders to non-consortium lenders or the company procuring and submitting counter-guarantees for the same.