The Hindu : Business : Tata Steel to raise Rs. 10,000 cr.

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Wednesday, Nov 21, 2007
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Tata Steel to raise Rs. 10,000 cr.

NEW DELHI: Tata Steel will issue equity shares on a rights and preferential basis to raise about Rs. 10,000 crore to repay ‘bridge loans’ raised for funding acquisition of British steel behemoth Corus.

“The proceeds will be used to repay bridge loans taken for acquisition of Corus. Tata Steel UK has raised 3.15 billion pounds of debt for financing the acquisition,” a Tata Steel spokesperson told PTI.

The issue, opening on November 22, would include 12.18 crore shares of Rs. 300 each to be issued on a rights basis in the ratio 1:5 and Cumulative Compulsory Preference Shares (CCPS) of Rs. 100 to be converted into equity on September 1, 2009, he said.

The issue would close on December 21, the spokesperson said, adding that the record date for the issue was November 7. According to the draft letter of offer filed with the Securities and Exchange Board of India, the rights issue will fetch Rs. 3,654 crore while CCPS will bring in Rs. 6,000 crore. Tata’s decision to raise funds from will result in enlargement of its equity by 20 per cent after the rights issue and 35 per cent after conversion of CCPS into equity. — PTI

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