Tikona Infinet and L&T Finance Resolve CCDs Dispute

Tikona Infinet and L&T Finance have reached a settlement over a dispute regarding Series 'E' Compulsorily Convertible Debentures (CCDs). Following a decision by the NCLT, both parties have agreed on a mutually beneficial resolution, ending shareholder disagreements over coupon payments.

On Monday, internet service provider Tikona Infinet announced a settlement agreement with L&T Finance Limited to resolve a financial dispute concerning debt bonds. This development follows an earlier application filed by L&T Finance with the National Company Law Tribunal (NCLT), Mumbai Bench, regarding default on coupon payments for Compulsorily Convertible Debentures (CCDs).

The agreement, signed on May 10, is intended to conclude previous shareholder disputes related to Series 'E' CCDs. Subsequently, L&T Finance has begun withdrawing its application from the NCLT. Tikona Infinet's founder and CEO, Prakash Bajpai, is optimistic about the resolution, stating that it will amicably settle all disagreements between LTF Limited and the other major shareholders.

Despite the restructuring of certain CCDs for equity conversion, the tribunal acknowledged they might still qualify as financial debt if the coupon obligations are binding. Tikona Infinet contended in its filings that these instruments were classified as equity securities rather than financial debt under the Insolvency and Bankruptcy Code. The company argued the coupon entitlements resemble dividends contingent on available distributable cash. The formal withdrawal process of the insolvency petition from NCLT is currently underway.

(With inputs from agencies.)