Dr Reddys Laboratories (DRL) has approved the allotment of 1,015,516,392 unsecured redeemable non-convertible debentures of Rs.5/- each carrying a coupon of 9.25per cent per annum, ("Bonus Debentures") amounting to an aggregate value of Rs.507.76 crore from the general reserve by way of distribution as bonus, to the members, based on their equity holding on the record date i.e. March 18, 2011, in the ratio of 6 bonus debentures of Rs.5 each for every equity share of Rs.5 each held.
This allotment has been made pursuant to the Scheme of Arrangement sanctioned by the Hon'ble High Court of Judicature, Andhra Pradesh at Hyderabad by its order passed on July 19, 2010, approval of the Reserve Bank of India vied its letter dated January 14, 2011 (for the issue of bonus debentures to foreign shareholders) and subsequent no-objection from income-tax department dated February 01, 2011. The Scheme came into effect on February 1, 2011.
The bonus debentures carry an interest at 9.25 per cent per annum payable annually in arrears i.e. 1st year interest on March 24, 2012, 2nd year interest on March 24, 2013 and 3rd year and final interest together with the redemption proceeds on March 24, 2014. The bonus debentures have tenure of three years from the date of allotment and will be redeemed on March 24, 2014. Further, these debentures have been assigned a rating of LAA+ by ICRA.