Tata Steel to launch 5.7 cr share FPO on January 19
Tata Steel said it will launch a 5.7 crore FPO on January 19 to part- finance the ongoing expansion of its Jamshedpur plant and repay some of its maturing debentures.
By PTI |
NEW DELHI: Tata Steel today gave formal notice to market regulator Sebi that it will launch a 5.7 crore follow-on public offer (FPO) on January 19 to part- finance the ongoing expansion of its Jamshedpur plant and repay some of its maturing debentures.
"The issue comprises a net issue to the public of 5.5 crore shares and a reservation of 1.5 crore equity shares for subscription by eligible employees. It would constitute 5.94 per cent of the post-issue paid-up equity share capital of the company," Tata Steel said in an offer document filed with markets regulator SEBI.
The issue will remain open for subscription till Januray 21.
The company said out of the total FPO proceeds, Rs 1,875 crore will be used to "part-finance the capital expenditure for expansion of its existing works at Jamshedpur".
The expansion work at the Jamshedpur plant, which is scheduled for completion by March this year, will augment the steel production capacity of the plant to 10 million tonnes per annum.
In addition, Tata Steel -- which has a net debt of USD 10.7 billion -- will use Rs 1,090 crore from the FPO proceeds to pay the redemption amount of some of the maturing redeemable non-convertible debentures held by the Tata Group company.
The FPO is expected to garner Rs 3,691.32 crore from the capital market, based on the closing price of Rs 647.60 per company shares on the Bombay Stock Exchange on Tuesday.
However, the company's scrips has fallen by over 4 per cent since then.
Tata Steel shares were being traded at Rs 621.7 apiece on the Bombay Stock Exchange today, down 2.47 per cent from the previous close.
Meanwhile, Tata Steel will launch a series of roadshows in India and abroad to lure the investors to the share sale, the first of which will kick off in Mumbai on January 17.
As of September 30, 2010, the company had a net debt of about USD 10.7 billion (Rs 48,790.6 crore), out of which USD 5.32 billion was in lieu of loans taken by the company for expansion of its Indian operations.
The outstanding debt of the company also includes a part of the USD 4.58 billion loan taken by the company to acquire UK-based steel-maker Corus in 2007.
In November, the Tata Steel board had approved a proposal to raise up to Rs 7,000 crore (USD 1.5 billion) through various instruments. Subsequently, on December 24, the company secured shareholders' nod to raise a maximum of Rs 5,000 crore.
Tata Steel has appointed seven banks to manage the issue, namely Kotak Mahindra Bank, Citi Bank, Deutsche Bank AG, Royal Bank of Scotland Plc, SBI Capital Markets, Standard Chartered Bank Plc and HSBC Bank.
"The issue comprises a net issue to the public of 5.5 crore shares and a reservation of 1.5 crore equity shares for subscription by eligible employees. It would constitute 5.94 per cent of the post-issue paid-up equity share capital of the company," Tata Steel said in an offer document filed with markets regulator SEBI.
The issue will remain open for subscription till Januray 21.
The company said out of the total FPO proceeds, Rs 1,875 crore will be used to "part-finance the capital expenditure for expansion of its existing works at Jamshedpur".
The expansion work at the Jamshedpur plant, which is scheduled for completion by March this year, will augment the steel production capacity of the plant to 10 million tonnes per annum.
In addition, Tata Steel -- which has a net debt of USD 10.7 billion -- will use Rs 1,090 crore from the FPO proceeds to pay the redemption amount of some of the maturing redeemable non-convertible debentures held by the Tata Group company.
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The FPO is expected to garner Rs 3,691.32 crore from the capital market, based on the closing price of Rs 647.60 per company shares on the Bombay Stock Exchange on Tuesday.
However, the company's scrips has fallen by over 4 per cent since then.
Tata Steel shares were being traded at Rs 621.7 apiece on the Bombay Stock Exchange today, down 2.47 per cent from the previous close.
Meanwhile, Tata Steel will launch a series of roadshows in India and abroad to lure the investors to the share sale, the first of which will kick off in Mumbai on January 17.
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As of September 30, 2010, the company had a net debt of about USD 10.7 billion (Rs 48,790.6 crore), out of which USD 5.32 billion was in lieu of loans taken by the company for expansion of its Indian operations.
The outstanding debt of the company also includes a part of the USD 4.58 billion loan taken by the company to acquire UK-based steel-maker Corus in 2007.
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In November, the Tata Steel board had approved a proposal to raise up to Rs 7,000 crore (USD 1.5 billion) through various instruments. Subsequently, on December 24, the company secured shareholders' nod to raise a maximum of Rs 5,000 crore.
Tata Steel has appointed seven banks to manage the issue, namely Kotak Mahindra Bank, Citi Bank, Deutsche Bank AG, Royal Bank of Scotland Plc, SBI Capital Markets, Standard Chartered Bank Plc and HSBC Bank.
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