Tata Steel okays exchange offer for $875mn securities
Press Trust of India / Mumbai Nov 12, 2009, 11:53 IST
Tata Steel today said it has approved an exchange offer for an existing $875 million securities into foreign currency convertible bonds to reduce the company's future debt obligations.
A committee of the board has approved a new foreign currency convertible bonds (FCCBs) in exchange for any or all the existing $875 million convertible alternative securities (CARS) due 2012, Tata Steel said in a regulatory filing.
Tata Steel said it is making the exchange offer with the objective of "lengthening its debt maturity profile, reducing the cost to the issuer and potentially reducing future repayment obligations."
The new FCCBs would mature in November 2014, while the CARS were due in 2012.
CARS holders can exchange any or all of their securities for the new FCCBs at the applicable exchange ratio.
The FCCBs are convertible into fully paid-up ordinary shares of Tata Steel at Rs 605.53 per share, a premium of more than 15 per cent over the closing price on November 11, at a fixed exchange rate of Rs 46.36 to the dollar, Tata Steel said.
Standard Chartered Bank, ABN Amro Bank and Citigroup are acting as dealer managers and Calyon Singapore as the co-manager for the offer. Citibank is the exchange agent.
Shares of Tata Steel were trading at Rs 510 on the BSE in early morning trade, down 3.11 per cent from its previous close.
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