Tata Steel plans rights, convertible issues to raise Rs9,135 crore

Mumbai: Tata Steel would raise Rs3,654 crore through a rights issue and another Rs5,481 crore through issue of convertible preference shares, totaling Rs9,135 crore, to partly finance its $13 billion acquisition of Corus.

The rights issue would be made in the ratio of one equity share for every five equity shares held at a price of Rs300 per share (i.e. face value of Rs10 each and a premium of Rs290 per share), raising an amount of Rs3,654 crore.

The 2 per cent cumulative convertible preference share (CCPS) issue of Rs100 each, compulsorily convertible into equity shares of Rs10 each, with an indicative conversion price in the range of Rs500 to Rs600 per equity share (on an ex-rights basis), is expected to raise a total amount of up to Rs6,000 crore, the company said in a filing with the Bombay Stock Exchange (BSE).

Tata Steel would issue CCPS of Rs5,481 crore in the ratio of 9:10 to the existing equity shareholders.

On conversion CCPS into equity shares, the equity share capital would stand increased to 82.21 crore shares of Rs10 each, totaling Rs8,221 crore.