Tata Steel preference issue to fund Corus merger raised to Rs6,000 crore

31 July 2007

Tata Steel today said it would increase the amount to be raised from the issue of preference shares from Rs4,350 crore to Rs6,000 crore, to fund its Corus acquisition. It also said that the contribution from Tata Steel and Tata Steel Asia Ltd, would be raised from $6.7 billion to $7.4 billion.

Tata Steel, has already completed the acquisition of Corus Group Ltd, at a total cost of $13 billion through its wholly-owned subsidiary, Tata Steel Asia Holdings Pvt Ltd.

In a regulatory filing, Tata Steel said that the other detailed terms of the preferential issues would be finalised closer to the time of the issue.

The rights issue of equity shares will remain the same at the ratio of 1:5 at a price of Rs300 per share.

Apart from the funds raised through equity capital in the last 12 months and the proposed rights issue of equity shares and convertible preference shares and long-term debt already raised by Tata Steel, the balance of the funds, if required, would be raised through structured issues in the foreign markets.

This will be within the amounts approved by the shareholders at the annual general meeting held on 5 July, 2006, and the approval sought at the forthcoming annual general meeting scheduled on 29August, 2007.