Tikona Infinet Settles Dispute with L''T Finance

Mumbai, May 12 (PTI) Internet service provider Tikona Infinet on Monday announced that they have entered into a definitive settlement agreement with L&T Finance Limited to resolve the dispute on debt bonds.

The announcement came after the National Company Law Tribunal (NCLT), Mumbai Bench, earlier admitted an application filed by L&T Finance against Tikona Infinet, citing default on coupon payments for CCDs.

Tikona Infinet said the pact was signed on May 10, bringing closure to a previously reported shareholder matter related to Series 'E' Compulsorily Convertible Debentures (CCDs), following which L&T Finance has started the process to withdraw its application.

"It was a dispute amongst the shareholders about Coupon Rights. I am glad to inform you that a settlement agreement has already been executed, which will settle all disputes amicably between LTF Limited and the other majority shareholders. A withdrawal application to the NCLT is under process," Tikona Infinet founder and CEO Prakash Bajpai said.

An email query sent to L&T Finance elicited no immediate reply.

The tribunal had observed that even though certain CCDs are structured for conversion into equity, they may still be considered financial debt if the coupon payment obligation is absolute, Tikona Infinet said in a statement.

Tikona Infinet had maintained in its legal filings that the instruments in question were classified as equity securities and did not qualify as financial debt under the Insolvency and Bankruptcy Code.

The company further argued that the alleged coupon entitlements were subject to the availability of distributable cash and were in the nature of dividends, not debt.

Following internal discussions among all relevant parties and stakeholders, both sides have reached a mutually agreeable settlement. The process for formal withdrawal of the insolvency petition from the NCLT is currently underway, the statement said.