Tata group’s Tata Steel Ltd will issue equity shares on a rights and preferential basis to raise about Rs10,000 crore to repay loans raised for funding the acquisition of British steel company Corus.
“The proceeds will be used to repay bridge loans taken for acquisition of Corus,” a Tata Steel spokeperson. who did not wish to be identified, said. “Tata Steel UK Ltd has raised £3.15 billion (Rs24,421 crore) of debt for financing the acquisition.”
The issue, which will open on 22 November, will include 12.18 crore shares of Rs300 each to be issued on rights basis in the ratio 1:5, and cumulative compulsory preference shares (CCPS) of Rs100 to be converted into equity on 1 September 2009. The issue will close on 21 December. The rights issue will fetch Rs3,654 crore, while CCPS will bring in an additional Rs6,000 crore, according to a Securities and Exchange Board of India filing.