Indian Hotels Company Ltd, the Tata group firm that operates the Taj chain of hotels, has decided to collect around Rs 1,700-1,900 crore through two rights issues to meet its long-term requirement for capital for expansion, including acquisitions.
The company will raise Rs 844 crore through a rights offer for equity shareholders, while it will mop up Rs 900-1,080 crore through a similar offer for unsecured convertible debenture-holders. The exact size of the fund collection through the rights offer of debentures will be determined at the time of the issue.
The company will offer one rights share to shareholders for every five shares they hold. The offer will be priced at Rs 70 apiece. Debenture holders will get one debenture for every 10 they hold. The debentures will carry a coupon rate of 4 per cent for five years. The debentures can be converted after two years at a price of Rs 150-180 apiece.
Earlier this month, the shareholders of Indian Hotels Company passed a resolution to bring down the limit of foreign institutional investors’ (FIIs’) holding in the company from 40 per cent to 30 per cent. FIIs currently hold 23.4 per cent and the promoters, 29 per cent. The company’s equity capital stands at Rs 60.29 crore.
Read more in The Business Standard article.
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