Defence Stock Withdraws Preferential Issue of 2,45,00,700 Convertible Equity Warrants

On Thursday, November 21, Apollo Micro Systems Ltd. notified the stock markets that the withdrawal of the 2.45 crore convertible warrant via a preferential basis had been reviewed and authorised by the board. Apollo Micro Systems' stock fell to an intraday low of Rs 90.85 on Friday after opening flat at Rs 92.19 a share following the announcement.

At its meeting on July 23, 2024, the Board proposed issuing 2,45,00,700 convertible equity warrants to certain designated non-promoter individuals and companies on a preferential basis. At its Extra Ordinary General Meeting on August 16, 2024, the Members approved the issuance of convertible warrants. On November 14, 2024, the company applied for and received in-principle approval from BSE Limited and NSE Limited to issue these warrants at a price of Rs. 108.15/-per warrant, convertible into equity shares of Re. 1/-each.

Key proposed allottees, including Eminence Global Fund PCC-Eubilia Capital Partners Fund I, North Star Opportunities Fund VCC-Bull Value Incorporated VCC Sub-Fund, and AG Dynamic Funds Limited (Multitude Growth Funds Limited), have sent letters to the company withdrawing their consent to subscribe to convertible equity warrants. They cite delays in opening the preferential offer between the date of their original consent on July 22, 2024, and the date of offer commencement on November 14, 2024. The aforementioned proposed allottees stated that they had changed their financial and strategic interests as a result of the lengthy gap, which led them to decide to cancel their subscriptions.

"Considering the substantial portion of the proposed issue that was to be subscribed by the aforesaid allottees, the withdrawal of their consent has significantly impacted the size and viability of the preferential issue. Hence, we wish to inform you that the Board considered and approved the withdrawal of the Preferential Issue of 2,45,00,700 Convertible Equity Warrants for the above-cited reasons," Apollo Micro Systems said in a stock exchange filing.

"We recognize the significance of maintaining transparency with our stakeholders. We want to ensure you that this withdrawal will not impact the financial stability, operations, or growth prospects of the Company," Apollo Micro Systems further informed stock exchanges.

In addition to serving the railway, automotive, and home land security sectors, Apollo Micro Systems (AMS), which was founded in 1985, is an expert in the design, development, and assembly of custom-built electronics and electro-mechanical systems for aerospace, defence, and space as its primary customers.