Domestic auto major Tata Motors is set to raise a total of Rs 7,200 crore to finance its acquisition of British luxury marques Jaguar and Land Rover. The company is looking at choices of equity and equity-linked securities, including possible listing on foreign stock markets such as Japan, as well as rights issues.
The total equity capital of the company would increase by about a third through these issues during the current financial year
The first of the three rights issues on offer would be of equity shares up to Rs 2,200 crore. The second will raise up to Rs 2,000 crore through an issue of ‘A’ equity shares carrying voting rights of 1 vote for every 10 ‘A’ equity shares. Normally, every share is equal to one voting right.
The third would be a rights issue of 5-year 0.5 per cent convertible preference shares (CCPs) upto Rs 3,000 crore, optionally convertible into 'A' equity shares after three years but before 5 years from the date of allotment.
It is not immediately clear about the ratios these securities would be offered at, the offer price or the conversion price of the CCPs.
"The funds would be raised to refinance the bridge loan taken by Tata Motors from various banks and other organisations to fund the acquisition," said C Ramakrishnan, chief financial officer, Tata Motors. Tata Motors is to pay $ 2.3 billion (Rs 9,800 crore) to the US-based Ford Motor for the two marques.
After gauging the response to the rights issue, the company would raise another $ 500 to 600 million (Rs 2000 to Rs 2500 crore) by a listing on the foreign markets including possibly, Japan.