Tulip locked in lower circuit after FCCB default

Tulip Telecom hit the lower circuit for the second consecutive day after the company defaulted on zero coupon FCCBs due on 26 August and sought an extension of deadline to 10 September.

The FCCBs amounts to $140.2 million, including the redemption premium.

The company had sought an extension to the deadline, citing a delay in disbursements from some lenders, a note by ICICI Direct said.

"The company has commitments of $50 million in a fresh FCCB and internal accruals of $72 million including Rs 200 crore made from selling its stake in Qualcomm to Bharti Airtel," the note said citing a press release from the company.

 Tulip locked in lower circuit after FCCB default

Fitch had recently downgraded the stock from junk to default. AFP

The remaining $18 million will be raised within the time extension sought.

Fitch had recently downgraded the stock from junk to default.

"The default on FCCBs along with huge debt, inability of the company to find a strategic investor for its data centre in Bangalore and a poor operating performance amid a challenging macroeconomic environment continue to remain huge concerns for the company," said ICICI Direct, which has downgraded the stock to sell.

Updated Date: Dec 20, 2014 19:45:26 IST