Sorry for a delayed response.
- Now, as per my knowledge, the decision to raise USD 30 million is taken,
but Roy is in talks with prospective investors to whom FCCB will be
issued,( that's why I suppose Roy was in Singapore last few days!).
Now, there's a big hullabaloo even in our PS Investors' group, over the
Conversion Price of FCCB. But my personal take is(since I'm an "investor"
in PS and not a "trader turned investor"), it's of NO importance,
whatsoever what CP, is because the bond holders are no idiots to give loan
to Roy if they don't find the deal attractive. For us,
Investors/shareholders ,only thing of prime importance should be what are
Roy's intentions/plans to do with the proceeds of FCCB money, and also if
he is actually adherering to his plans. Which is a positive for me. Or is
he simply taking a loan to clear off his previous debts or cover up some
stupid expenses. That's a big red flag for me. Also it will be considered a
positive if the FCCB are hedged, PS can hedge their payments to bond
holders using currency swaps or currency forward contracts.
To cut to the chase I wouldn't speculate over the CP.
Secondly, not to speculate over FCCB conversion to Equity leading to
dilution, because if conversion occurs, then debt will also get reduced by
I have not met Roy, but my group members have, more than once and are
prolly planning again shortly.
But, of what I heard from them about Roy, is that he is a frugal, pragmatic
person, a workaholic and passionate for business guy. Even his office
doesn't look that impressive, (saw from the pictures taken by my group
members),which I take to be positive.(not squandering money on unnecessary
things), like Peter Lynch says,"
The extravagance of any corporate office is directly proportional to
management's reluctance to reward shareholders". Also he has a thorough
knowledge of the business, the ins and outs and has a vision to have a
2700crs revenue by 2019(as per latest Investors Presentation). Roy has bet
his own bottom dollars in PS by giving a 60 Crs interest free loan to the
company. That speaks aplenty.
- Regarding your second query, give me a few days to get back, as I want
to give an objective answer and not a subjective one. I'm in the middle of
a thorough analysis on PS, starting with Porter's five forces on the
industry, a SWOT on PS, Pro-forma statements, free cash flow models, etc.
Hope the above reply was helpful.