Can loan be converted into debentures?

Hold the General Meeting on fixed day and pass Special Resolution for issuing Debentures or taking Loan with an option to convert these debentures or loan into shares of the company in future. Prepare the minutes of General Meeting, get them signed and compile accordingly.

How do you convert debentures?

A letter of option is sent to debenture holders and one copy of the same is filed with SEBI. The secretary then verifies the consent sent by debenture holders for conversion. Debenture is converted into equity shares. A notice of conversion is sent and debenture holders are asked to return debenture certificates.

Can loan be converted into non convertible debentures?

After the Reserve Bank of India (RBI) rejected the proposal to provide an ‘SLR’ status to bonds, lenders have now agreed to convert Air India’s loan into non-convertible debentures (NCDs).

How do I convert my loan into shares?

The procedure for conversion of unsecured loan into equity:

1. Compliance at the time of taking a loan. Hold a Board Meeting for.
2. Compliance at the time of converting the loan to equity. Hold a Board Meeting and pass a resolution for allotment of shares by converting the loan to equity.

What is a loan conversion?

A conversion loan is a loan that rolls over, or converts, to a different loan structure after a certain term. This functionality, enabled at the product level, is most commonly used to price construction-to-permanent loans, where a short-term loan converts to permanent financing at a later point.

How do you convert debt to equity?

In its simplest form, a creditor’s existing debt (including principal and accrued interest) is converted into shares in the borrower. New shares are issued to the lender in satisfaction of the debt and the loan is no longer owed.

What does conversion of debentures mean?

A convertible debenture is a type of long-term debt issued by a company that can be converted into shares of equity stock after a specified period. Convertible debentures are usually unsecured bonds or loans, often with no underlying collateral backing up the debt.

How do you convert debentures into equity?

Procedure of converting debentures into shares

1. Articles of Association of the Company should allow for Conversion option.
2. Hold Board Meeting and pass the Board Resolution for Conversion of CCD into Equity Shares along with approving Notice of Genernal Meeting for the approval of Shareholders of the Company.

Can you convert a loan into equity?

The lender converts a loan amount or a loan amount represented by outstanding bonds into equity shares when it’s converting debt to equity. No actual cash is exchanged in the debt-to-equity swap.

What is a conversion option?

Conversion option refers to a clause that has to do with adjustable-rate mortgages (ARM) that enable an individual to change the adjustable-rate mortgage to fixed rates at a certain future date. The conversion option also applies to preferred stock and bond issues.