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Corporate - Overseas Borrowings


Tata Motors prices first tranche FCCN issue at Rs 573.10

Our Bureau

Mumbai , April 20

TATA Motors Ltd has priced the first tranche of $100 million of the total $400-million foreign currency convertible note (FCCN) issue at Rs 573.10 per share.

This price is at a 17.5 per cent premium to the company's closing share price on the Bombay Stock Exchange on April 19, 2004.

The $400 million FCCN issue is the largest international capital market offering from India as yet. This is the first ever multi-tranche convertible offering by an Indian company with tranche one being the first ever negative yield structure offering by an Indian company. The foreign currency bonds will be listed on the Singapore Stock Exchange.

The notes are convertible into either ordinary shares of the company of GDS representing ordinary shares of the company at the option of note holders.

In the event the entire issue is subscribed, the equity capital will increase by 6.4 per cent and equity infusion will be to the extent of Rs 24.5 crore, a company spokesperson said.

The FCCN issue is being offered in two tranches. The second tranche aggregates $300 million and is convertible at a conversion price of Rs 780.40 per share, which is at a 60 per cent premium to the stock price that closed on April 19, 2004.

The tranche one notes are zero coupons and will be redeemable at a discount of 4.89 per cent after five years and tranche two carries a coupon of 1 per cent per annum and will be redeemable at a premium of 21.78 per cent after seven years.

The company has an option to redeem the tranche one notes after one year, subject to relevant approvals. The issue was launched after market trading hours on April 19, 2004, Merrill Lynch, Morgan Stanley, Citigroup and JP Morgan acted as the joint bookrunners for this offering.

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