Tata Motors' Rs4,200 crore rights issue to open this month-end

Mumbai: The board of directors of Tata Motors Limited at its meeting held today approved the terms of simultaneous and unlinked issue of rights shares of an aggregate value of Rs4,200 crore ($935 million).

Tata Motors Ltd, India's top vehicle maker, said the two rights issues are expected to open around the end of September.

Tata Motors said it would offer one ordinary share of Rs10 face value each at Rs340 for every six such shares held, to raise Rs Rs2,186 crore.

It would also offer one 'A' ordinary share of Rs10 face value each, but has different voting and dividend rights, for every six shares held, at a price of Rs305, to raise Rs1,961 crore.

The holder of 'A' ordinary shares shall be entitled to one vote for every ten 'A' ordinary shares held and will be entitled to receive dividend at 5 percentage points more than the rate of dividend declared on the ordinary shares.

The proposed issue, subject to the necessary regulatory approvals/process, is slated to open around September-end.

Tata Motors said the proceeds of the issue will be used to prepay part of the short term bridge loan availed by its subsidiary for financing its $2.3 billion acquisition of Jaguar and Land Rover from Ford which was completed on 2 June.