Tata Steel plans FPO to raise Rs700 cr: reports
10 January 2011
Tata Steel is planning to raise up to Rs7,000 crore through a follow-on public offer (FPO) to part-finance its expansion, according to unconfirmed reports.
A report stated that the company's proposed market offering is expected in the form of shares or warrants or a mix. The company has taken shareholders' postal approval to raise funds, following the board's approval in November 2010.
On Friday, the company had inked a joint venture agreement with Nippon Steel for setting up a Rs 2,300-crore specialty steel-making line having a capacity of 60,000 tonnes per annum at Jamshedpur to cater to the domestic auto sector (See: Tata Steel inks JV with Nippon Steel for Rs2,300-cr steel plant in Jamshedpur). The project is expected to be operational in three years.
Tata Steel would hold a majority 51 per cent stake in the unnamed joint venture entity while the Japanese major would have the rest 49 per cent stake, the domestic steel major said in a filing to the Bombay Stock Exchange.
"The project (continuous annealing and processing line) will be set up at a capital cost of about Rs2,300 crore and is expected to come on stream in 2013," it said, adding that the entity was expected to be incorporated within a month.