In Oct 2012, Verona Plc announced its intention to take over Bala Corp, after an unsuccessful discussion with Balas board regarding a possible acquisition. By publicly announcing its intention, Verona Plc informed Bala Corps shareholders about the high premium and the benefits they could receive. Verona also approached two main shareholders of Bala Corp, discussing the possibility of changing some of the companys board members. In January 2013, Bala Corp announced a major recapitalization plan. The plan featured the payout of a $4.7 billion dividend, which was to be financed through the selloff of assets and the assumption of considerable debt. Bala agreed to pay a $25 dividend to stockholders combined with a $5 subordinated debenture for each of its 156.5 million shares. The cash portion of this pay-out came to $4 billion. The debentures had a face value of $783 million and a 16% coupon rate. The repayment of the debentures was structured so that no payments would be made for five years, so as the demands of cash outflows will be reduced. At the end of year five it will repay the debentures, whose interest rate is 7.5%. Bala raised about $2.25 billion from asset sales. It also increased its financial leverage by borrowing $1.9 billion (market value, with interest rate of 7.5%). Its debt to equity ratio rose from 26% to 87% following the recapitalization.