Clarification on Issuance of Optionally Convertible Debentures

[devika jayaraj]

Hi Team,

We want to seek your guidance on the following matter:

Can a private company issue Optionally Convertible Debentures (OCDs) which are unsecured, and include a condition stating that “the Investor OCDs shall be optionally convertible to such class of preference shares of the Company, ranking pari passu with such class of preference shares, in accordance with Conversion clause, or redeemable at the option of the investor”?

Specifically, we would like to confirm whether the company can issue OCDs with an option to convert into preference shares when the type/class of preference shares is not specified at this stage, and also where the OCDs are unsecured.

Kindly provide your guidance on this.

Regards

Devika Jayaraj

[Gopal Rathnam]

Long ago I handled TWO OCD by private companies. 1). Option to convert is to make the Debenture exempt from Deposit Rules. 2). OCD was listed in NSDL 3). I am not sure How the fund managers manage OCD.

gopalrathnam-9886618696

[AVADHI JAIN]

Can someone share a copy of conversion of loan into equity shares? (Equity shares were issued)

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