Tata Steel launches exchange offer for CARS

The Board of Tata Steel Ltd (the "Company") had authorized the Committee of the Board to consider and approve an exchange offer of new foreign currency convertible bonds for any or all of the existing US$ 875,000,000 Convertible Alternative Reference Securities due 2012 (the "CARS"). The CARS have a yield to maturity of 5.15% p.a. and are convertible into Qualifying Securities or ordinary shares of the Issuer.

The Committee has approved on November 11, 2009 the launch of such an offer. The Company is inviting holders of the CARS ("Holders") to offer to exchange any or all of their CARS for new convertible bonds due 2014 (the "Exchange Bonds") at the applicable Exchange Ratio (the "Exchange Offer"), subject to and in accordance with the terms of the offering memorandum dated as of today's date (the "Offering Memorandum").

The Company is making the Exchange Offer with the objectives of (i) lengthening its debt maturity profile; (ii) reducing the cost to the Issuer; and (iii) potentially reducing future repayment obligations. The Exchange Bonds have a coupon (and yield to maturity) of 4.5% each and will mature on November 21, 2014. They are convertible into fully paid up ordinary shares of the Company at INR 605.5325 per share at a fixed exchange rate of INR46.36 = US$1.00 (the "Conversion Price") which is 15% in excess of the closing share price of the Company on November 11, 2009. Standard Chartered Bank, ABN AMRO Bank NV., Hong Kong Branch and Citigroup Global Markets Ltd are acting as the Dealer Managers and Calyon Singapore as the Co-Manager for the Exchange Offer. Citibank, N.A., London Branch is the Exchange Agent."

The stock closed the day at Rs.511.85, down by Rs.14.50 or 2.75%. The stock hit an intraday high of Rs.528 and low of Rs.507.90.

The total traded quantity was 2860484 compared to 2 week average of 2575346.

Source : Equity Bulls

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