Description

Changes in security package and repayment structure through proposed TFCI debt, including release of exclusive charge over Hotel Division assets.

Summary

Magnum Ventures Ltd has announced changes to the security package for its existing debentures. The company will release the exclusive charge over Hotel Division assets and cashflows to enable creation of exclusive security in favor of TFCI for proposed new debt. Other securities including charges over Paper Division assets, movables, receivables, cashflows, and equity share pledge will remain unchanged until full redemption.

Key Points

  • Release of exclusive first ranking mortgage on Hotel Division assets (Sahibabad, Ghaziabad)
  • Release of exclusive charge over Hotel Division cashflows
  • First ranking exclusive mortgage on Paper Division assets to remain unchanged
  • First ranking exclusive charge over all movables, receivables and cashflows of Paper Division to remain unchanged
  • Exclusive pledge over 83,24,255 equity shares of promoter to remain unchanged
  • Hotel Division assets will come under exclusive charge of TFCI post-disbursement/redemption
  • Hotel Division assets will no longer form part of security for existing debentures to the extent redeemed
  • Secured debt reduces proportionately upon redemption

Regulatory Changes

This disclosure represents a material modification to the terms of existing debt securities, specifically the security package. The change involves restructuring collateral arrangements to accommodate new financing from TFCI while maintaining partial security coverage for existing debenture holders.

Compliance Requirements

  • Existing debenture holders are informed of the security restructuring
  • Debenture Trustee to facilitate release of exclusive charge over Hotel Division
  • Creation of exclusive security in favor of TFCI for proposed debt requires formal charge release documentation
  • Revised security structure to be documented and registered as per applicable regulations

Important Dates

No specific dates mentioned in the circular. The changes are effective upon TFCI disbursement and proportionate redemption of existing debentures.

Impact Assessment

For Existing Debenture Holders:

  • Reduction in security coverage as Hotel Division assets are released from charge
  • Continued protection through remaining securities (Paper Division assets, movables, receivables, equity pledge)
  • Proportionate reduction in secured debt upon redemption mitigates risk of reduced collateral

For the Company:

  • Enables access to new TFCI debt financing secured by Hotel Division assets
  • Maintains existing debt structure with modified security package
  • Facilitates potential refinancing or restructuring of existing obligations

Commercial Justification: TFCI requires exclusive security over Hotel Division as lending condition. The release of charge is commercially justified as secured debt reduces proportionately upon redemption, and lenders’ rights remain protected through the revised security structure.

Impact Justification

Material change in security structure for existing debenture holders involving release of charge over Hotel Division assets to facilitate new TFCI debt financing