|
| Tata Steel to raise Rs 1,600 cr |
| BS Reporter / Mumbai Jul 15, 2010, 00:31 IST |
|
Tata Steel, the country’s largest producer of the alloy, plans to raise about Rs 1,600 crore in a preferential allotment of shares and warrants to the promoter, Tata Sons. The preferential allotment will take place at Rs 594 a share, a 17.6 per cent premium to today’s closing price of Rs 505.
In a notice to the Bombay Stock Exchange (BSE), the company said that a special resolution had been passed to issue 150,00,000 shares and 120,00,000 warrants to Tata Sons. Warrants can be converted within 18 months of the allotment.
On 27 May, Tata Steel had announced the preferential allotment plan and today, it announced the price at which the allotment would take place.
Tata Sons, the main holding company of the salt-to-steel diversified Tata Group, has a 29.13 per cent stake in the company. This would rise to 31.22 per cent after the allotment of shares and conversion of warrants.
“Tata Group’s holding is increasing in the company and that is a positive sign,” said Paresh Jain, an analyst with Angel Stock Broking.
“Tata Steel’s balance sheet is pretty leveraged and the company may use the raised fund to de-leverage it,” said Chirag Shah, an analyst at Mumbai-based brokerage IDFC-SSKI. The company had net debt of $9.8 billion at the end of 31 March, 2010, and its net debt to equity was 1.77. “The company is also looking at backward integration of Corus and it may invest the money to develop the mines in Mozambique and Canada,” said Shah.
A company spokesperson did not elaborate on the purpose of the fund raised.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
