Tata Steel on Monday said that its promoters holding in the company would come down to 2.4 per cent post its follow-on public offer (FPO), scheduled to hit the market on January 19.

“Promoters holding in Tata Steel will come down to 2.4 per cent after the follow-on public offer (FPO),” Tata Steel’s Chief Financial Officer, Koushik Chatterjee, told reporters here.

As on September 30 last year, promoters held a 32.48 per cent stake in the company, while insurance companies and foreign institutional investors held 22.4 per cent and 15.87 per cent stakes, respectively.

The company has fixed the price-band of its FPO between Rs 594-610 per share which will hit the market between January 19 to 21.

At the higher end of the price-band, the company expects to mop-up Rs 3,477-crore and at the lower end, Rs. 3,385-crore.

Of the total FPO proceeds, Tata Steel plans to use Rs. 1,800-crore for the expansion of its Jamshedpur facility and Rs. 1,000-crore for debt repayment, Mr. Chatterjee said.

The expansion work at the Jamshedpur plant, which is scheduled for completion by March this year, will augment the steel production capacity of the plant to 10 million tonnes per annum.

As on September 30, 2010, the company had a net debt of about $10.7-billion (Rs. 48,790.6-crore), out of which $5.32-billion is in lieu of loans taken by the company for expansion of its Indian operations.

The outstanding debt of the company, which has an annual steel-making capacity of 27-million tonnes, also includes a part of the $4.58-billion loan taken by the company to acquire U.K.-based steel-maker Corus in 2007.

The world’s seventh-largest steel-maker is also open to investing a part of its proceeds in a project of Australian miner, Riversdale.

“A part of the proceeds will be at the company’s board discretion to invest in projects there,” he said.

On Riversdale, Mr. Chatterjee said, “Our stake in Riversdale is a strategic investment and we are focusing on development of the Benga power plant project in Mozambique.”

Tata Steel has appointed seven banks to manage the issue-Kotak Mahindra Bank, Citi, Deutsche Bank AG, Royal Bank of Scotland Plc, SBI Capital Markets, Standard Chartered Bank Plc and HSBC Bank.

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