M&M Financial Services to raise Rs570-crore through private placement

Mahindra & Mahindra Financial Services Ltd proposes to raise around Rs570 crore through qualified institutional placement. The company is however, yet to decide on the price, quantity or time of issue as also other terms and conditions.

The board of directors of the company at its meeting today approved among others to raise funds through private placement of equity shares, subject to the approval of the shareholders.

The company has set up a committee to fix the time, price and other terms of the contract or such other terms and conditions of the private placement of shares.

Mahindra and Mahindra said it planned to use funds from the capital issue to, inter alia, augment the long term resources by way of enhancing the Tier I capital base, leverage available business opportunities, provide funding for loans to the customers of the company and for general corporate purposes.

Post issue, the company's authorised capital will increase to Rs190 crore from Rs160 crore earlier.

The company also proposes to increase the limit for investments in the company's paid-up share capital by foreign institutional investors to 49-per cent from the existing 35 per cent.

The company will seek shareholders' consent through a postal ballot for the changes in capital structure and has fixed 1 December 2010 as the cut off date for ascertaining the list of the shareholders to whom the postal ballot notice and postal ballot form will be sent.

Meanwhile, credit rating agency Crisil has upgraded the rating of M&M's long-term bank facilities to 'AA+ / Stable' from 'AA / Positive'. The rating on the short-term facilities and commercial paper programme has been reaffirmed at 'P1+', the company said in separate.