Compulsory convertible debentures are debt or equity
This query is : Resolved
19 July 2016
Dear All,
I want to know that whether Compulsory Convertible Debentures (CCDs) having buy/put option are debt or Equity. Also please provide any supporting for the answers.
Thank you in advance.
I want to know that whether Compulsory Convertible Debentures (CCDs) having buy/put option are debt or Equity. Also please provide any supporting for the answers.
Thank you in advance.
Amol S Joglekar
(Expert)
19 July 2016
Till the time of conversion, it is DEBT.
Once converted into equity, it becomes equity.
(The answer is from the view point of accountancy.)
For a banker, the company may argue, that since it is compulsory covertible, please treat it as equity
Once converted into equity, it becomes equity.
(The answer is from the view point of accountancy.)
For a banker, the company may argue, that since it is compulsory covertible, please treat it as equity
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19 July 2016
Amol ji can u please provide any supporting for the same i.e. any RBI circular or any guideline.
Amol S Joglekar
(Expert)
19 July 2016
No.....RBI has not clarified whether or not it is debt or equity
https://indiacorplaw.blogspot.in/2009/03/fdi-compulsorily-convertible-debentures.html
https://www.india-financing.com/Understanding_Compulsory_Convertible_Debentures.pdf
https://indiacorplaw.blogspot.in/2009/03/fdi-compulsorily-convertible-debentures.html
https://www.india-financing.com/Understanding_Compulsory_Convertible_Debentures.pdf
Amol S Joglekar
(Expert)
19 July 2016
you are most welcome.
Amol S Joglekar
(Expert)
19 July 2016
yes, you can write back anytime, no issues.
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