Description

Changes in security package for existing debentures of Magnum Ventures Ltd to enable creation of exclusive security in favor of TFCI for proposed debt, involving release of 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 create exclusive security in favor of TFCI for proposed new debt. The security over Paper Division assets, movables, receivables, cashflows, and 83,24,255 pledged promoter equity shares will remain unchanged until full redemption.

Key Points

  • Release of exclusive charge over Hotel Division assets and cashflows
  • Hotel Division security will be exclusively charged to TFCI for the proposed debt
  • Paper Division (Sahibabad, Ghaziabad) assets remain secured under existing debentures
  • First ranking exclusive charge over all movables, receivables, and cashflows of both divisions to continue
  • Exclusive pledge over 83,24,255 promoter equity shares remains in place
  • Post-disbursement/redemption, Hotel Division assets will come under exclusive charge of TFCI
  • Hotel Division will no longer form part of security for existing debentures (to the extent redeemed)
  • Secured debt reduces proportionately upon redemption
  • Lenders’ rights remain protected through revised security structure

Regulatory Changes

No regulatory changes. This is a disclosure of material changes to security arrangements for existing debt securities.

Compliance Requirements

  • TFCI requires exclusive security over Hotel Division as part of its lending conditions
  • Charge release is essential to secure the proposed TFCI debt
  • Proportionate release of charge justified as secured debt reduces upon redemption
  • Company must maintain security structure to protect existing debenture holders’ rights

Important Dates

No specific dates mentioned in the circular.

Impact Assessment

Impact on Existing Debenture Holders:

  • Partial reduction in security coverage as Hotel Division assets will be released from the security pool
  • Security now limited to Paper Division assets, movables, receivables, cashflows, and pledged equity shares
  • Lenders’ rights remain protected through the revised security structure

Impact on Company:

  • Enables access to new TFCI financing secured by Hotel Division assets
  • Facilitates debt restructuring and potential redemption of existing debentures
  • Maintains operational flexibility across both divisions

Commercial Justification:

  • TFCI’s exclusive security requirement necessitates the charge release
  • Proportionate reduction in security aligns with redemption of existing debt
  • Overall security structure remains adequate for existing debenture holders

Impact Justification

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