England and Wales High Court (Commercial Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		24/02/2016

Mr Justice Burton :

1. This has been the hearing of an application by the Claimant for summary judgment in respect of its claim that, on a true and proper construction of Condition 8.11 of the Terms and Conditions ("the Conditions") governing the US $70m 2.5% Convertible Bonds, due 2017 convertible into equity shares of the Defendant, ("the Bonds"), the Mandatory Conversion Notice by the Defendant dated 31 July 2015 ("the Notice") was invalid and of no effect, such that the Defendant is not entitled to rely upon it. In its response to the application for summary judgment, the Defendant asserted that on a true and proper construction of Condition 8.11 the Notice was valid. During the course of the hearing the parties sensibly agreed that there should be before me an application by them jointly for the determination by me of a Preliminary Issue as to the validity of the Notice. I am therefore entitled, and indeed obliged, to resolve the issue on the balance of probabilities, and there is thus no need for consideration of the nice questions of the onus and standard of proof on a summary judgment and reverse summary judgment application. There is another issue raised in the proceedings ("the Manipulation issue"), but this does not fall for consideration before me.
2. The Defendant is listed on the Bombay Stock Exchange and the National Stock Exchange of India ("the NSE") and issued the Bonds by a Trust Deed dated 20 September 2012 ("the Trust Deed"). The Bonds are issued to a number of Bondholders. The Claimant is the Trustee of the Bonds and has been instructed by a group of such Bondholders to bring these proceedings. Condition 8.2 of the Conditions permits the Defendant mandatorily to convert the Bonds into shares of the Defendant at any time on or after 20 September 2015 (prior to the date falling seven business days before the Maturity Date of 21 September 2017) having given not less than 30 or more than 60 days' notice, in circumstances where the Closing Price of the shares (as defined in Condition 6.3.15 of the Conditions) for each of the 30 consecutive days prior to the Notice was at least 130% of the principal amount divided by the Conversion Ratio (as defined in Condition 6.1.3). Such mandatory conversion of the Bonds must be "in whole but not in part".
3. The Claimant asserts that the Notice was invalid, because it did not contain the information which it asserts was required to be incorporated in the Notice by Condition 8.11. The Defendant asserts that Condition 8.11 is inapplicable, and that the Notice had no need to incorporate any of its contents, such that the Notice was valid and in accordance with Condition 8.2.
4. The Notice that was sent is attached as an Appendix to the Judgment.
5. There is also the right of a Bondholder to convert Bonds into shares at his election. The price fixed for conversion in the case of either mandatory or optional conversion is the same, and is provided for in Condition 6.
6. Conversion will be in the interests of the Bondholder when the Defendant's share price is trading above the (fixed) Conversion Price. This is because the Bondholders will effectively be 'buying' shares in the Defendant at a price below the value at which they trade, which they could then sell in the market. Where the shares are trading below the fixed price, the Bondholder's interest will be to retain the Bonds until they are redeemed (either on maturity or beforehand) at their face value. If the Bondholder exercised his option to convert then he would be able to keep the shares rather than their being sold by the Share Agent in accordance with Condition 8.2. By Conditions 8.3 and 8.4 in certain circumstances the Defendant could serve a Redemption Notice entitling it to redeem (in whole but not in part) the Bonds for the principal amount prior to the Maturity Date. The Bondholder's right of conversion applied even where the Defendant itself had served a mandatory conversion notice or a redemption notice, providing it took place seven days before the date specified in such notice.
7. Although there was some argument between the parties as to whether summary judgment should be granted and as to the remedies available in the light of the positions of third parties, e.g. other Bondholders, in the event once the resolution by way of the preliminary issue was agreed on that became unimportant.


The contractual documents


8. The Trust Deed in clause 1 (Interpretation) defines the Conditions as follows:-

" 'Conditions' means the terms and conditions set out in Schedule 1 as from time to time modified in accordance with this Trust Deed…..".


Schedule 1, which consists of 5 pages paginated at pages 36-40 inclusive of the 56 page document consisting of the Trust Deed and its Schedules, is in fact a "Form of Certificate for Definitive Bonds". The only reference to the Conditions is in the scheduled proposed format of the Bonds which reads, so far as material:-


"The Bond or Bonds in respect of which this Certificate is issued.. are in registered form.. and constituted by the Trust Deed referred to on the reverse hereof. The Bonds are subject to, and have the benefit of, that Trust Deed and the terms and conditions (the "Conditions") set out on the reverse hereof."


On the fifth and last page (numbered page 40) of the Schedule is the intended back page of the draft Form of Certificate which reads:-


"Terms and Conditions of the Bonds.

The following other than the words in italics is the text of the Terms and Conditions of the Bonds substantially as they will appear on the reverse of each of the definitive certificates evidencing the Bonds."

9. The Conditions themselves are not within the paginated 56 page document and not included in the Table of Contents of the Trust Deed.

The Conditions are in a separate (unpaginated) document, providing by Condition 21:-

"21 Governing Law

The Bonds, the Trust Deed… and any non-contractual obligations arising out of or in connection with them are governed by, and shall be construed in accordance with, the laws of England…"

There is a separate Definitions section (Condition 6.3.15) which includes the definition of "Closing Price" as referred to below.

10. The Condition which has been in issue in these proceedings is Condition 8.11, which reads as follows:-

"8.11 Redemption Notices

All notices to Bondholders given by or on behalf of the Issuer pursuant to this Condition will be given in accordance with Condition 17, and specify the Conversion Price as at the date of the relevant notice, the closing price of the Shares (as quoted on the NSE) as at the latest practicable date prior to the publication of the notice, the accrued interest to the date fixed for redemption, the date for redemption, the manner in which redemption will be effected and the aggregate principal amount of the Bonds outstanding as at the latest practicable date prior to the publication of the notice.

No notice of redemption given under Condition 8.3 or Condition 8.4 shall be effective if it specifies a date for redemption which falls during a Closed Period or within 15 days following the last day of a Closed Period".

11. The principles of contractual construction were not in issue between the parties: both parties referred to (among others) Rainy Sky SA v Kookmin Bank [2011] 1 WLR 2900, Re: Napier Park European Credit Opportunities Fund Limited [2014] EWCA Civ 984 and Arnold v Britton [2015] 2 WLR 1593. The only contested issue of law between the parties related to the role of the heading to Condition 8.11, to which I shall return below. Both sides addressed in their skeletons, but only minimally at the hearing, a fallback argument about the reasonable recipient test, referring to Mannai Investment Co v Eagle Star Life Assurance Co Limited [1997] AC 749 (including the blue paper / pink paper question addressed by Lord Hoffmann at 716) and further considered in Rennie v Westbury Homes (Holdings) Limited [2007] EWCA 1401 and Siemens Hearing Instruments Limited v Friends Life Limited [2014] 2 P. & C.R. 5, but there was in the event no need to consider this at any length.
12. As the Claimant's case depends upon establishing that the Notice served by the Defendant was invalid because it did not contain the matters which it asserts were mandatorily required to be included in the Notice by Condition 8.11, I shall set out, by reference to Condition 8.11 which I have quoted above, and number separately, the six matters which Condition 8.11 requires to be specified in a Notice governed by it:-

i. The Conversion Price as at the date of the relevant notice ("Item 1")

ii. The closing price of the Shares (as quoted on the NSE) as at the latest practicable date prior to the publication of the notice ("Item 2")

iii. The accrued interest to the date fixed for redemption ("item 3")

iv. The date for redemption ("Item 4")

v. The manner in which redemption will be effected ("Item 5")

vi. The aggregate principal amount of the Bonds outstanding as at the latest practicable date prior to the publication of the notice ("Item 6").

The Claimant contends that Condition 8.11 applies not only to Redemption Notices but also to a Mandatory Conversion Notice such as was served in this case.

13. The Claimant's case was persuasively presented by Felicity Toube QC, with Charlotte Cooke. She first submits that the heading to Condition 8.11 must be ignored. For this she relies on two clauses of the Trust Deed:-

"1.3 Headings. Headings shall be ignored in construing this Trust Deed.

1.4 Schedules. The Schedules are part of this Trust Deed and have effect accordingly".

Consequently she submits that the fact that Condition 8.11 is headed "Redemption Notices" must be ignored.

14. The text of Condition 8.11 commences "All notices to Bondholders given by or on behalf of the Issuer pursuant to this Condition". She submits that "Pursuant to this Condition" is a reference to (the whole of) Condition 8, which includes Condition 8.2 relating to Mandatory Conversion. Thus all notices pursuant to Condition 8, including that provided for in Condition 8.2, are governed by the requirements of Condition 8.11:-

i) She accepts that not all notices referred to throughout Condition 8 are in fact material to, and hence affected by, this mandatory requirement:-

(a) Conditions 8.1, 8.7, 8.9 and 8.10 do not provide for or require a notice.

(b) Conditions 8.5, 8.6 and 8.13 make their own provisions for the content of the relevant notices and are not affected by Condition 8.11.

(c) Condition 8.12 is a provision relating to multiple Notices, to which any requirement would be inapt.

Consequently Condition 8.11 applies (only) to Condition 8.2 (Mandatory Conversion at the Option of the Issuer), 8.3 (Redemption at the Option of the Issuer), 8.4 (Redemption for Taxation Reasons) and 8.8 (Non-Permitted Conversion Price Adjustment Event Repurchase Right).

ii) She also accepts (although this was a change from the Claimant's pleaded case) that not all the matters specified in Condition 8.11 (Items 1 - 6 above) are required to be included in a Mandatory Conversion Notice under Condition 8.2, so that of the matters set out in paragraph 8.11 it is only those which are appropriate for a Mandatory Conversion Notice which need to be specified in one. I turn to consider each of Items 1-6.

15. Ms Toube's case as to these 6 Items is as follows:-

(i) Item 1: Conversion Price. It is common ground that this is required in a Conversion Notice, and also in a Redemption Notice (because a right to convert arises under Condition 6.1.1).

(ii) Item 2: closing price. Although originally the Claimant's case was that this was directly relevant to a Conversion Notice, Ms Toube accepted in the light of the submissions of Simon Bryan QC and Edward Brown for the Defendant that the Closing Price for the purpose of a Conversion Notice is wholly different from the closing price in a Redemption Notice. Closing Price (with capitals) is, as referred to in paragraph 9 above, specifically defined in relation to a Conversion Notice in Condition 8.2 by Condition 6.3.15, and includes a process of averaging by reference to consultation with an independent securities firm: closing price (no capitals) for the purposes of a Redemption Notice is a one-off price as defined in Condition 8.11, and is included in case the Bondholder wishes to exercise his right of conversion. Ms Toube accepts that such closing price is not directly relevant to a Conversion Notice, but she submits that it is still relevant information to give in a Conversion Notice, in case the recipient wished to consider exercising his own option to convert (at the same price) which would enable him to keep the shares if he chose, rather than have them sold by the Share Agent, in which case it would be of relevance to know a recent closing price.

(iii) Item 3: Accrued interest to the redemption date. While originally the Claimant sought to say that this should be read, in the context of a Conversion Notice, as meaning "accrued interest to the conversion date", so as to complain about its omission in this Notice, Ms Toube's case before me was that this item was simply inapplicable in a Conversion Notice and did not need to be included.

(iv) Item 4: Date for redemption – ditto: now accepted as not required to be included.

(v) Item 5: Manner of redemption – ditto: now accepted as not required to be included.

(vi) Item 6: Aggregate amount of Bonds outstanding. This is, as Mr Bryan pointed out, on the face of it irrelevant to a Conversion Notice, as there can be no amount of Bonds outstanding when a Conversion Notice is issued, as it has to be issued in respect of converting the Bonds "in whole but not in part" (Condition 8.2). Ms Toube however submitted that such would also be the case in respect of Redemption Notices under Conditions 8.3, 8.4 and 8.6, whereby the Defendant's option to redeem Bonds is also "in whole but not in part": only Redemption Notices under Condition 8.5 ("Redemption for Change of Control") and 8.7 ("Redemption Following Exercise of a Put Option") allowed for redemption in part. In any event she submitted that such information would be, as with Item 2, at least potentially relevant for a Bondholder considering exercising his own option to convert in the face of a mandatory conversion, in order to keep the shares, because it might impact on a decision to elect for optional conversion and sell the shares to know, as Ms Toube put it, "how many Bonds are out there".

16. Hence the mandatory operation of Condition 8.11, in respect of a duty to specify in a Conversion Notice those of Items 1-6 which were appropriate, should have led the Defendant to include Items 1, 2 and 6. Her case is straightforward - any Item expressly mentioning redemption is omitted.
17. Ms Toube submitted that if Condition 8.11 did not apply to Condition 8.2, then there would be no specific requirements laid down for what is to be included in a Mandatory Conversion Notice, unlike, for example, Conditions 8.5 and 8.6. Condition 8.11 applies (with the exceptions she makes in paragraph 14 (i) above) to all Notices under Condition 8, as is made clear by the first paragraph of Condition 8.11; and the second paragraph of Condition 8.11 is then dedicated to special arrangements relating to Redemption Notices given under Conditions 8.3 or 8.4.
18. Finally, Ms Toube submits that the words "all notices .. given .. pursuant to this Condition" is a reference to Condition 8 as a whole and not just to Condition 8.11, because a notice pursuant to Condition 8 is thus a reference to all notices given pursuant to any of Conditions 8.2, 8.3, 8.4, etc, whereas no notices are given pursuant to Condition 8.11, which is not an originating provision.
19. Both counsel referred to certain clauses in the Trust Deed, and indeed in the Conditions, to make a point which in the event I was satisfied, and I think both accepted, amounted to a score draw. Mr Bryan referred to Clause 9.25 of the Trust Deed relating to Mandatory Conversion, which referred to giving notice "of any proposed mandatory conversion in accordance with Condition 8.2" thus making no mention of Condition 8.11 as relating to requirements for a notice; and there was a similar, but less obvious point in relation to Condition 6.2.3 (ii), where there were references to Condition 8.2 without mention of Condition 8.11. On the other hand Ms Toube referred to Clause 9.15 of the Trust Deed, referring, in the case of early redemption, to a requirement to give "prior written notice… pursuant to Condition 8.3 or Condition 8.4", without any mention of Condition 8.11, which on any basis governed the procedure for the giving of notice under those Conditions. It seems to me that the explanation is that there was no need to refer to a notice provision when reference is being made to the substantive Conditions governing Mandatory Conversion or Redemption.
20. Mr Bryan's response to Ms Toube is as follows. He submits that the heading to Condition 8.11 is both clear and determinative. He has to accept that the general heading of Condition 8, "Redemption, purchase and cancellation", is inaccurate, because it does not refer to conversion, which is plainly included in Condition 8 by Condition 8.2, and both Condition 8.1 ("Maturity") and 8.10 ("Cancellation") address Bonds which are "redeemed, converted or purchased". However an inaccuracy in one heading does not necessarily lead to a conclusion as to inaccuracy in another heading, and the headings within Condition 8 are all very clear, Condition 8.2 relating to Conversion, Conditions 8.3 – 8.7 relating to Redemption, 8.8 to Repurchase and then the general headings follow (8.9 "Purchases", 8.10 "Cancellation", 8.11 "Redemption Notices", and 8.12 "Multiple Notices").
21. He addresses Ms Toube's submissions with regard to the heading, set out in paragraph 13 above, as follows:-

i) Clauses 1.3 and 1.4 of the Trust Deed are not relevant. The Schedules are part of the Trust Deed, but the Conditions are not a Schedule, albeit referred to in a Schedule, and are not part of the Trust Deed. Nor are they 'deemed to be incorporated' in the Trust Deed, and the Form of Certificate in Schedule 1 differentiates between the Trust Deed and the Conditions, as set out in paragraph 8 above, reciting that the Conditions "will appear on the reverse" of the certificates evidencing the Bond. Hence although headings are to be "ignored in construing this Trust Deed", they are not required to be ignored in construing the Conditions.

ii) In any event, such a provision would not require the court to ignore the heading completely. He refers to Bell J in SBJ Stephenson Ltd v. Mandy [2000] FSR 286, where there was a similar provision that "clause headings are inserted for convenience only and shall not affect the construction of the agreement", and Bell J concluded (at 297) that the Court was entitled to look at such a heading where it could "tell the reader at a glance what the clause is about". In Doughty Hanson & Co.Ltd v. Roe [2007] EWHC 2212 (Ch) Mann J (in the face of a similar clause) considered it admissible to look at the heading as "descriptive of what the provision is about" (paragraph 71). Ms Toube referred to Gregory Products (Halifax) Ltd v. Tenpin (Halifax) Ltd [2012] 2 AER (Comm) 645, where there was a provision to the effect that "headings.. shall not affect the interpretation". The clause being interpreted by Lewison J was headed "Conditionality", when it was clear that the clause was unconditional. The learned judge considered (at paragraph 28) that "in very general terms that clause is about conditionality, but that general proposition does not help to decide the importance that the parties placed on any particular part of [it]… it seems to me that respect for party autonomy means that the headings cannot be allowed to alter what would otherwise have been the interpretation of the clause in question." Mr Bryan submitted that this was a case far closer to that considered by Bell J and Mann J of the heading being "descriptive of what the provision is about", namely "Redemption Notices".

22. Quite apart from the heading however, Mr Bryan submits that the content of Condition 8.11 plainly applies to Redemption Notices and not to Conversion Notices. He refers to the second paragraph of Condition 8.11, referred to in paragraph 17 above, which he submits indicates that the second paragraph simply comprises a special exception to the effectiveness of Redemption Notices which otherwise comply with the provisions in the first paragraph. He submits that if a Condition refers to more than one of the processes covered by Condition 8, that will be made clear, as in Conditions 8.1 and 8.10 referred to in paragraph 20 above.
23. Above all, however, he relies upon the six items specified in Condition 8.11, as set out in paragraph 12, in relation to which Ms Toube's submissions are set out in paragraph 15 above. Ms Toube has to accept that what on the face of it are matters mandatorily required to be specified only apply as appropriate; and in particular that Items 3, 4 and 5 are not appropriate, and thus not required to be specified. This, he submits, undermines the whole concept of such mandatory requirements. In any event, he submits that Items 2 and 6, which are accepted to be relevant in the case of a Redemption Notice, are also not appropriate in the case of a Conversion Notice:-

i) He points out that, in his third witness statement, Mr Nye, the Managing Director of the Claimant, asserted the alleged significance of the requirement in Condition 8.11 to include the Closing Price (which is indeed required for a Conversion Notice in Condition 8.2), without appreciating that the matter to be specified according to Condition 8.11 was the closing price and not the Closing Price. Ms Toube could not support this, but she submits that the closing price is nevertheless indirectly relevant, as set out in paragraph 15 (ii) above. Mr Bryan however submitted that the closing price (if relevant at all to a moving market) could very easily be obtained if required, as Ms Sehra pointed out in paragraph 31.1 of her witness statement on behalf of the Defendant.

ii) As to Item 6, if in fact there has been a Conversion Notice pursuant to Condition 8.2, or indeed a Redemption Notice pursuant to Conditions 8.3 or 8.4, whereby (all and not part of) the Bonds had (respectively) to be converted or redeemed, then the information required by Item 6 would be of no value at all, as the answer would be a simple and obvious one, namely that there were (by virtue of the Notice) none outstanding. The position would, or could, be different in the case of redemption pursuant to Conditions 8.5, 8.6 or 8.7, when the information could be significant.

In those circumstances Mr Bryan submitted that all six Items were relevant in the case of a Redemption Notice and only the first in the case of a Conversion Notice.

24. Once it is clear, as Mr Bryan submits it to be, that Condition 8.11 refers only to Redemption Notices, then it is obvious that only those Conditions within Condition 8 which relate to Redemption Notices – Conditions 8.3, 8.4 etc - would be affected, and the exercise necessary for Ms Toube of assessing which Conditions were governed by Condition 8.11 (paragraph 14 above) would be unnecessary. If Condition 8.11 applied, as it does, to a Redemption Notice within Conditions 8.5 or 8.6, which already set out requirements as to what is to go into a relevant notice, then the Condition 8.11 Items are additional; they may possibly in some cases be supernumerary but it is not suggested that they are inconsistent.
25. Condition 8.2 can stand perfectly well without the need for Condition 8.11. The Notice in this case complied with Condition 8.2, in the sense of setting out all the necessary information required for Condition 8.2, including the Closing Price, and was sufficient and comprehensible.
26. As to Ms Toube's submissions with regards to the notices being pursuant to Condition 8.11, Condition 8.11 is the condition laying down the requirements for inclusion in the notices, so that all Redemption Notices must be given pursuant to Condition 8.11.
27. I am satisfied, and persuaded by the clear arguments of Mr Bryan, that Condition 8.11 is not referring to all notices pursuant to Condition 8, i.e. including Condition 8.2. It would have been simpler to be able to be satisfied that the words "this Condition" were bound to be a reference to Condition 8.11, but unfortunately the draftsman has not been at all consistent in this regard:-

i) Within Clause 8.11 itself there is reference to "Condition 8.3 or Condition 8.4", showing that on any basis it is accepted that what might have been described as a sub-condition is indeed a Condition, so that the words "this Condition" is plainly capable of referring to Condition 8.11. However:

ii) In Condition 8.12 there is reference to "this Condition 8". On the other hand:

iii) In Condition 8.13 there is a reference within the same paragraph to "this Condition 8.13" and to "Condition 8.13".

On that basis "pursuant to this Condition" could refer to Condition 8.11 or it could refer to the entirety of Condition 8.

28. However, I am persuaded by the very clear picture by reference to the Items which are specified in Condition 8.11 as required to be included in a Notice, that they are all relevant to a Redemption Notice. There is some substance in Ms Toube's submission that Item 2 (the closing price) is as relevant to a recipient of a Conversion Notice, who might elect to consider whether to hang on to his shares by serving a voluntary conversion notice, as to a recipient of a Redemption Notice who may wish to consider counter-serving a Conversion Notice. However, I am wholly unpersuaded by her submission as to the relevance of Item 6, the aggregate Bonds outstanding, to a recipient of a Conversion Notice, as opposed to a Redemption Notice where it might be (Conditions 8.5, 8.6, 8.7) that not all the Bonds were to be redeemed. Although after the Conversion Notice some recipients might decide to serve a voluntary Conversion Notice and keep their shares, at the date of the Conversion Notice none of that would or could be known to the Defendant at the time of its service, when the answer would always be as set out in paragraph 23 (ii) above, an answer which would not tell the recipient of the Conversion Notice anything he did not already know.
29. Two matters in particular persuade me that Mr Bryan is right:-

i) If Ms Toube is right that Condition 8.11 is to be the methodology for putting Condition 8.2 into effect, then it seems somewhat odd that the list of Items to be mandatorily specified in a Conversion Notice does not include the Closing Price (as well as, or instead of, the closing price, which is at best useful information for the recipient).

ii) One of the most significant factors to be taken into account when a Court is, guided by the authorities, construing a contract, is the matter of certainty. Whereas Ms Toube's analysis of the mandatory requirements of Condition 8.11 requires the interpolation of the words "if appropriate", causing the draftsman of the Notice somewhat of a headache, particularly if he were understandably uncertain about the appropriateness of Item 6, on Mr Bryan's case the mandatory requirements of Condition 8.11, relating to Redemption Notices as they do, simply lead the draftsman to include all six Items.

30. I therefore reach the conclusion that Condition 8.11 relates to Redemption Notices only, without addressing the heading. I am however satisfied that I am entitled to look at the heading, for both of the reasons which Mr Bryan urged upon me. I do not consider that in construing the Condition the headings to the Conditions are required to be ignored as a result of Clause 1.3 of the Trust Deed; whereas the Schedules are part of the Trust Deed, so that no doubt the approach to headings in the Schedules might have been governed by Clause 1.3, the Conditions are simply referred to in, and stand alongside, the Trust Deed. If I were wrong as to that, then I would follow Bell J and Mann J and find it impossible not to be assisted by the heading to Condition 8.11. Whereas Lewison J found the heading in Gregory Products to be inconsistent with the content of the clause, I am persuaded that it is entirely consistent, and that it would astonish the commercial men who were parties to these contractual arrangements if the clear words in the heading to Condition 8.11 had to be ignored.
31. I accordingly resolve this preliminary issue by concluding that the Defendant's construction is correct, and that the Notice did not need to include the contents of Condition 8.11, and was consequently valid.
Appendix 1 CASTEX TECHNOLOGIES LIMITED (Formerly Known As AMTEK INDIA LIMITED) Corporate Office: 3 LSC Pamposh Enclave, Greater Kailash-I, New Delhi-110048 Tel: +91-11-42344444 Fax : +91-11-42344400 E-mail: info@amtek.com Web : www.amtek.com CIN: L65921 HR1983PI.C033789 Mandatory Conversion Notice Castex Technologies Limited (formerly known as Amtek India Limited) US$ 70,000,000 2.50 per cent Convertible Bonds Due 2017 Convertible in equity shares of Castex Technologies Limited (formerly known as Amtek India Limited )
 



 


Date: July 31, 2015


 


To,

1. Citibank N.A. London Branch

Care of:

Citibank N.A. Dublin Branch

Ground Floor

1 North Wall Quay

Dublin 1

Ireland

Fax: +353 1 622 2210/+353 1506 0339

Attention: Agency and Trust - PPA Payments

(acting in its capacity as the "Conversion Agent")

with a copy to:

Citibank N.A. Hong Kong Branch

56^th Floor, One Island East

18 Westlands Road

Island East '

Hong Kong

Fax: +852 2323 0279

Attention: Agency and Trust

2. Citicorp International Limited

55^6h Floor, One Island East

18 Westlands Road

Island East

Hong Kong

Fax: +852 2323 0279

Attention: Agency and Trust

(acting in its capacity as the "Trustee")

Regd. Office:

Village Narsinghpur Mohammadpur,

Old Manesar Road Gurgaon, Haryana -123106 Tel. : +91-124-2373406

Fax ; +91-124-2373028

E-mail: ail.ggn@amtek.com

3. Citigroup Global Markets Deutschland AG

Reuterweg 16

60323, Frankfurt

Germany

Fax: +49 69 1366 1429

Attention: German Agency and Trust

(acting in its capacity as the "Registrar)

SUB: Notice by Castex Technologies Limited (formerly known as Amtek India Limited) ("Issuer") under condition 8.2 of the Conditions of the USD 70,000,000, 2.50% convertible bonds due 2017 ("Bonds") for the mandatory conversion of the Bonds into equity shares of the Issuer ("Mandatory Conversion Notice").

32. All terms capitalized in this Mandatory Conversion Notice and not specifically defined herein shall have the meaning as ascribed to them in the Offering Circular dated September 18, 2012 or the Trust Deed dated September 20, 2012 executed between the Issuer and the Trustee or the Agency Agreement dated September 20, 2012 executed between the Issuer, the Principal Agent, the Registrar and the Trustee, as applicable (collectively, "Bond Documentation").
33. The board of directors of the Issuer, at a meeting held on July 31, 2015, approved the exercise by the Issuer of its right to mandatorily convert all outstanding Bonds in accordance with Condition 8.2 and other applicable Conditions. Accordingly, this Mandatory Conversion Notice has been issued in terms of Condition 8.2 of the Conditions, to mandatorily convert all outstanding Bonds, i.e. 283 bonds ("Relevant Bonds") into 30683416 equity shares ("Conversion Shares") on September 25, 2015 ("Conversion Date").
34. The conversion of the Relevant Bonds into the Conversion Shares on the Conversion Date will be undertaken at a price per Conversion Share of Rs. 103.005 ("Conversion Price") which price is based on the Initial Conversion Price and the Conversion Ratio as stated under condition 6.1.3.
35. The delivery of this Mandatory Conversion Notice to the Bondholders (through service by the Conversion Agent in terms of the Bond Documentation and as per the register of Bondholders maintained by the Registrar), Citicorp International Limited ("Trustee"), Citibank N.A London Branch ("Principal Agent") and the Registrar, in accordance with Condition 17, shall form an irrevocable exercise of the Issuer's rights to convert the Relevant Bonds into the Conversion Shares based on the Conversion Price on the Conversion Date.
36. The Issuer undertakes that the Closing Price of the Shares translated into U.S. dollars at the Prevailing Rate for each of the 30 consecutive days prior to the date of this Conversion Notice was at least 130 per cent. of the principal amount divided by the Conversion Ratio.
37. The Issuer confirms that no event has occurred during the preceding 30 days from the date of this Mandatory Conversion Notice which shall give a rise to the change of the Conversion Price and undertakes that if an event occurs that gives a rise to a change in the Conversion Price between the date of this Mandatory Conversion Notice and the date immediately preceding the Conversion Date, then appropriate adjustments for the relevant days approved by an investment bank (acting as expert) as selected by the Issuer shall be made for the purpose of calculating the Closing Price for such days.
     
    
38. Upon the receipt of this Mandatory Conversion Notice by Bondholders (through service by the Conversion Agent in terms of the Bond Documentation and as per the register of Bondholders maintained by the Registrar), Citicorp International Limited ("Trustee"), Citibank N.A London Branch ("Principal Agent") and the Registrar, the aforementioned and holders of the Relevant Bonds are hereby requested to undertake their respective roles and responsibilities as identified in the Bond Documentation, including without limitation, delivery of Conversion Notice with respect to the relevant Bonds in accordance with applicable provisions of Condition 6.2 for the conversion of the Relevant Bonds into the Conversion Shares on the Conversion Date.

For and on behalf of Castex Technologies Limited

(Formerly known as Amtex India Limited)

Company Secretary