Tata Power Company Ltd informed the stock exchanges on Tuesday about a plan to issue a little more than 2 crore equity shares and warrants to the promoters, Tata Sons, for around 10 per cent of the total equity shares of the company.
At today’s price, it would amount to around Rs 1220 crore. The final price will be determined later as per the norms. The Tata Power scrip closed at Rs 610.65 on the BSE on Tuesday.
The company informed the exchange late on Tuesday evening about a postal ballot for shareholders to approve the preferential issue of shares. The postal ballot will close on June 18, 2007.
A Vaishnavi Corporate Communication official who represents Tata Power said that no company official was available to comment. The issue of shares has been divided into to parts.
There will be an issue of a little more than 98 lakh equity shares on a preferential basis for cash and there will be another 103 lakh warrants that will be exercisable after April 1, 2008. The warrants have to be exercised within 18 months.
The announcement comes on the heels of the news that Tata Power has mandated Calyon to arrange $950 million (Rs 3859 crore) as loan. Bloomberg reported that the loan will be used to fund the Indonesian mine purchases planned by the company.
The promoters holding in Tata Power at the moment is a little more than 32 per cent. The information sent to the Bombay Stock Exchange says that the preferential allotments of the shares and the warrants will each not exceed five per cent of the company’s equity. The issue will, therefore, raise the promoter’s equity in the company to more than 40 per cent sometime in 2008.