Citigroup Venture Capital-backed Shiv-Vani Oil & Gas Exploration Services Limited is raising Rs 250 crore through issue of secured redeemable optionally convertible debentures to ICICI Bank. The company had earlier disclosed that it plans to raise funds for repayment of rupee debts and long term working capital requirements.
The debentures are convertible into equity at Rs 575/share or almost 95% premium to the current market price of the company. Shiv Vani scrip was down 5.2% at Rs 295 in a weak Mumbai market on Friday.
This could give ICICI Bank almost 8.5% stake post conversion. But that is when ICICI Bank goes for conversion which would depend on the share price of the company in the future. Incidentally, ICICI Bank Canada already owns 5.1% in Shiv Vani through conversion of FCCBs three years ago.
Incorporated in 1989, Shiv-Vani is engaged in the upstream sector of the hydrocarbon industry. Headquartered in Delhi, the company offers a wide spectrum of services in the field of oil and natural gas exploration and production.
For the half year ended September 30, the company had consolidated net sales of Rs 685 crore with net profit of Rs 97.11 crore compared to revenues of Rs 601 crore with net profit of Rs 98.45 crorein the corresponding period the previous year.
CVCI had picked around 7% in Shiv Vani for Rs 102.5 crore in July 2007 at a price of Rs 375 per share. Although its percentage holding has declined with some equity dilution by the company, CVCI continues to hold almost the entire quantum of shares it subscribed to over three years ago and owned around 5.87% as of September 30. If and when ICICI Bank decides to convert the debentures into equity, CVCIs stake will come down further to 5.3%.