The Hindu : Business : Tata Steel to issue rights shares

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Tuesday, Oct 09, 2007
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Tata Steel to issue rights shares

To raise Rs. 9,654 cr. to part finance Corus acquisition

To allot cumulative preference shares
Rights share ratio fixed at 1:5

MUMBAI: Tata Steel on Monday said it would raise Rs. 9,654 crore by issuing securities to the existing shareholders, apparently to part finance its acquisition of Anglo-Dutch firm Corus.

The board of directors of the company has approved the issue of equity shares in the ratio of 1:5, wherein one equity share of Rs. 300 each would be allotted for every five shares held, raising an amount of Rs. 3,654 crore, the company informed the Bombay Stock Exchange.

Further, the company would allot cumulative convertible preference shares (CCPS) of Rs. 100 each to the existing shareholders, convertible into equity shares of Rs. 10 each, with an indicative conversion price in the range of Rs. 500 to Rs. 600 per share for raising a total amount of up to Rs. 6,000 crore.

The committee of directors at its meeting on October 5 approved the allotment of CCPS of Rs. 5,481 crore in the ratio of 9:10 to the existing equity shareholders on a rights basis.

Six CCPS of the face value of Rs. 100 each would be automatically converted into one equity share of Rs. 600 each on September 1, 2009. There would, however, be no redemption of CCPS.

On conversion of CCPS into equity shares, the equity share capital would increase to 82.21 crore shares of Rs. 10 each.

Tata Steel had completed the Corus acquisition on April 2, 2007, at a price of 608 pence per ordinary share in cash. — PTI

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