Eraaya Lifespaces Announces Exit from USD 120 Mn FCCB Program
The move follows a detailed assessment of the issuance, which was originally intended to fund the acquisition of Ebix Inc.
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Eraaya Lifespaces Limited has announced that its Board of Directors has approved a strategic exit from its USD 120 million Foreign Currency Convertible Bonds (FCCBs) program. The move follows a detailed assessment of the issuance, which was originally intended to fund the acquisition of Ebix Inc.
Although the acquisition was completed through alternative funding routes, the company reports that USD 40 million of the raised amount remains unjustifiably withheld by Elara Capital PLC and certain bondholders. This development, Eraaya stated, has obstructed the primary commercial intent behind the FCCB issuance and has made its continued operation legally untenable under the Indian Companies Act, 2013.
In its official communication, the Board expressed concerns over the fragmented state of the bonds, which it believes threatens the company’s governance and regulatory compliance. A significant point of contention is the role of Oyster Bay, an FCCB subscriber managed exclusively by Elara Capital, which also served as the issuance advisor. Eraaya cited this as a serious conflict of interest and a breach of fiduciary duty.
Despite repeated appeals to release the withheld funds, Elara Capital and associated bondholders have reportedly failed to cooperate. The company also stated that it has faced coordinated attempts to destabilise operations through regulatory complaints, targeted media reports, and threats directed at its leadership.
The advisory board of Eraaya, which includes respected figures such as former Enforcement Directorate official Karnal Singh, ex-SEBI Chairman G.N. Bajpai, and former Central Vigilance Commissioner T.M. Bhasin, has unanimously supported the decision to exit the program.
Eraaya emphasised that no legitimate bondholder would face financial loss and that all resolutions would be executed transparently and in accordance with the law. The company also reserved the right to seek legal remedies for any damages resulting from the alleged misconduct linked to the FCCB issuance.
Eraaya Lifespaces Limited has announced that its Board of Directors has approved a strategic exit from its USD 120 million Foreign Currency Convertible Bonds (FCCBs) program. The move follows a detailed assessment of the issuance, which was originally intended to fund the acquisition of Ebix Inc.
Although the acquisition was completed through alternative funding routes, the company reports that USD 40 million of the raised amount remains unjustifiably withheld by Elara Capital PLC and certain bondholders. This development, Eraaya stated, has obstructed the primary commercial intent behind the FCCB issuance and has made its continued operation legally untenable under the Indian Companies Act, 2013.
In its official communication, the Board expressed concerns over the fragmented state of the bonds, which it believes threatens the company’s governance and regulatory compliance. A significant point of contention is the role of Oyster Bay, an FCCB subscriber managed exclusively by Elara Capital, which also served as the issuance advisor. Eraaya cited this as a serious conflict of interest and a breach of fiduciary duty.
