Tata Steel Ltd to raise additional long term funds

Tata Steel Ltd has announced that the members of the Company, by way of Postal Ballot, have passed the Special Resolution under Section 81(1A) of the Companies Act, 1956 for issue of up to 1,50,00,000 Ordinary Shares and up to 1,20,00,000 Warrants on Preferential Allotment Basis to the Promoter i.e. Tata Sons Ltd., with requisite majority.

Further the Company has informed that, as part of the above find raising and the authority granted by the Committee of Directors on May 27, 2010, Mr. H. M. Nerurkar, Managing Director of the Company has approved the proposal to offer on a preferential basis, the following Securities to the main promoter, viz. Tata Sons Ltd. in accordance with the provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (SEBI ICDR Regulations 2009).

1,50,00,000 Ordinary Shares will be issued at a price of Rs. 594/- per share (which is as per SEBI's pricing formula) aggregating to Rs. 891 crores and 1,20,00,000 warrants, where each Warrant would entitle Tata Sons Ltd. to subscribe to one Ordinary Share of the Company at a price of Rs. 594/- per share, within eighteen months from the date of allotment of Warrants. As per SEBI ICDR Regulations 2009, an amount equivalent to 25% of the price fixed as above i.e. Rs. 148.50 per Warrant aggregating to Rs. 178.20 crores would be paid by Tata Sons Ltd. on allotment of the Warrants.

The allotment of Preferential Shares and Warrants will be completed within the prescribed period.

The stock closed the day at Rs.505.85, down by Rs.2.40 or 0.47%. The stock hit an intraday high of Rs.519.45 and low of Rs.503.50.

The total traded quantity was 1804100 compared to 2 week average of 1583499.

Source : Equity Bulls

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