Tata Sponge to raise Rs 1,800 cr via rights issue
MUMBAI: Tata Sponge Iron, a subsidiary of Tata Steel, is planning to raise up to Rs 1,800 crore through a rights issue to primarily retire existing debt early, said two people familiar with the matter.
The company had raised debt to help fund its acquisition of the steel business of debt-ridden Usha Martin (UML).
The board will meet on Thursday to consider the terms of the right issue, including the rights entitlement ratio, total number of shares to be issued, issue price and record date. It has already obtained approval from stock exchanges for the proposed rights issue.
Tata Sponge Iron is expected to price the rights issue at about 20-25% discount to the current market price, one of the persons cited above told ET. Axis Capital, SBI Cap, Centrum Capital are helping the company to run the issuance. Individual arrangers could not be contacted immediately for comments.
An email sent to the company did not elicit any response until the publication of this report.
Shares of Tata Sponge, which declined 8% so far this year, ended flat at Rs 710.25 on Wednesday. So far in the current financial year, five companies have raised a record Rs 51,000 crore through rights issues. Two telecom operators, Airtel and Idea-Vodafone, have successfully raised Rs 25,000 crore each last month.
Tata Sponge in April completed the acquisition of Usha Martin's steel business undertaking, including its captive power plants. The deal was coRead More – Source