Question

Write a letter to debentureholder informing him about conversion of debentures into equity shares.

Answer 1

1. Convertible debentures are the debentures that are converted into equity shares on the expiry of a specified period at a specified rate mentioned in the terms of issue.
2. After the receipt of the Letter of Option, the Secretary sends a letter informing the debenture holders that the debentures are converted into equity shares.
3. The secretary either sends the share certificate along with the letter or states in the letter that the share certificate will be issued to them in due course.
4. The company has to get the approval of shareholders by passing a special resolution at the Extra Ordinary General Meeting for the conversion of debentures into equity shares.
5. After receiving the approval, the company sends a letter of conversion of debentures to the debenture holders.

HULK MOTORS LTD.

Registered office: Plot No. 05, Commercial Towers, P.K. Road,
Mumbai - 400067

CIN: R20020 MH 1000 PLC123456

Website: wwww.hulkmotors.in
Email: [email protected]
Date: 17th Oct, 2020

Phone: 022 12345678
Fax: 022 - 11112222
Ref. No.: C/2060/20-18
Mr. John Methiw
508, Lokesh Apartments,
AK.D. Road,
Mumbai – 4000089

Sub: Conversion of Debentures into Equity Shares

Dear Sir,

        I am directed to inform you that in accordance with the terms decided at the time of issue of 1,00,000, 10% fully convertible debentures, the debentures are due for conversion. In accordance with the above, a Special Resolution was passed by the shareholders in the Extra - Ordinary General Meeting held on 5th Oct, 2020 for approval of the conversion of debentures into equity shares in the ratio of 2 : 1.

        As per your Letter of Option you have been allotted 50 Equity shares in lieu of 100 Debentures. Details of your holding after conversion are as follows:

1	2	3	4		5
Folio No.	No. of Debentures held	No. Of Equity Shares Issued	Distinctive Numbers		Share Certificate No.
			From	To
D-123	100	50	901	100	5678

       Duly signed and executed share certificate is enclosed herewith. Debenture Certificate will be null and void w.e.f. 5th Oct, 2020.

      Thanking You,

Yours Faithfully,    
For Hulk Motors Ltd.

 Sign           
Mr. Kamlesh Gaikwad
Company Secretary

Encl: Share Certificate