The Hindu : Business : Tata Motors prices $400 m FCCB offering

Online edition of India's National Newspaper
Wednesday, Apr 21, 2004

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Business

Tata Motors prices $400 m FCCB offering

By Our Corporate Reporter

CHENNAI, APRIL 20. Tata Motors announced that it has priced a $ 400 million foreign currency convertible note issue. The notes are expected to be listed on the Singapore Stock Exchange. The notes are convertible into either the ordinary shares of the company or GDSs representing ordinary shares, at the option of the note holders. The notes will be issued in two tranches: Tranche 1 aggregating $ 100 million is convertible at a conversion price of Rs. 573.106 per share, which is at a 17.5 per cent premium to the company's closing share price on the BSE on April 19. Tranche 2 aggregating $ 300 million is convertible at a conversion price of Rs. 780.40 per share, which is at a 60 per cent premium to the closing share price referred to above.

The tranche 1 notes are zero coupon and will be redeemable at a discount of 4.89 per cent after five years while the tranche 2 notes carry a coupon of 1 per cent per annum and will be redeemable at a premium of 21.78 per cent after 7 years.

The company has an option to redeem the tranche 1 notes after one year, subject to relevant approvals.

The maximum equity dilution that would take place, if all the notes were to be converted, would be limited to approximately 6.4 per cent, comprising additional paid-up capital of Rs.7.65 crores (2.1 per cent maximum dilution) due to full conversion of tranche 1 bonds and additional paid-up capital of Rs.16.86 crores (4.3 per cent maximum dilution) due to full conversion of tranche 2 bonds.

This would translate in to infusion of additional equity of Rs. 24.50 crores if all the notes amounting to Rs.1,750 crores were to be converted.

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