Debenture Add Cross For Free

Rules of Conversion: The debenture holders have the option to convert their debentures in the case when the conversion is to be made at or after 18 months but before 36 months of allotment.

Procedure of converting debentures into shares Articles of Association of the Company should allow for Conversion option. 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.

The debenture can typically only be converted into stock after a predetermined time, as specified in the bond's offering. A convertible debenture will usually return a lower interest rate since the debt holder has the option to convert the loan to stock, which is to the investors' benefit.

Definition: Optionally convertible debentures are debt securities which allow an issuer to raise capital and in return the issuer pays interest to the investor till the maturity.

Redemption of debentures discharges the company from its liability and removes it from the balance sheet. Also, this is a major transaction for the company because it involves a significant amount of money. This is the reason the company also creates a Debenture Redemption Reserve (DRR) account.

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.

Conversion of Debentures or loans into shares also does not amount to inflow of cash.

The resolution for Conversion of Debentures into Equity Shares should be approved in the Board Meeting. The approval of shareholders, as well as Debentures Holders, is taken for the Conversion. After passing of the Board Resolution, the notice for General Meeting should be passed.