Mr Koushik Chatterjee, Group Chief Financial Officer, Tata Steel
Mumbai, Nov. 20 Tata Steel said it will issue convertible bonds totalling $546.9 million in exchange for $493 million worth of securities it received on Friday.
The company launched the exchange programme on November 11 as part of its efforts to lower financial cost.
The response for the exchange offer in terms of the securities submitted for conversion forms 56 per cent of the $875 million convertible alternative reference securities (CARS) due in 2012.
The CARS have a yield to maturity of 5.15 per cent per annum and are convertible into qualifying securities or ordinary shares.
Under the exchange offer, the company invited the CARS holders to exchange their holding for new convertible bonds due in 2014. The new bonds have a coupon (and yield to maturity) of 4.5 per cent each and will mature on 21 November, 2014, (5 years and 1 day from date of issue).
They are convertible into fully paid-up ordinary shares of the company at Rs 605.53 a share at a fixed exchange rate – Rs 46.36 for $1 (the conversion price), which is 15 per cent higher to the closing share price of the company at launch.
In a filing to the BSE, Tata Steel said the exchange offer period had expired. The principal amount accepted for the exchange is $493 million and the new foreign currency convertible bonds to be issued would be $546.9 million.
The remaining outstanding amount for CARS is expected to be $382 million, the company said.
Mr Koushik Chatterjee, Group Chief Financial Officer, Tata Steel, said, “While Tata Steel does not have any near-term material repayment requirements over the next 12-15 months, as part of our long-term financing strategy, we continue to seek market opportunities to reduce the financing costs on a proactive basis. In line with the above, the company launched this exchange offer to exchange part or all of the existing CARS for a fresh set of convertible bonds. This not only reduces the overall finance charges for the company, but also extends the maturity of the bonds by two years. In addition, the lower conversion premium makes the exchange bonds more equity-like, which is in line with the company’s overall de-leveraging strategy.”
Sourcethehindubusinessline.com
The company launched the exchange programme on November 11 as part of its efforts to lower financial cost.
The response for the exchange offer in terms of the securities submitted for conversion forms 56 per cent of the $875 million convertible alternative reference securities (CARS) due in 2012.
The CARS have a yield to maturity of 5.15 per cent per annum and are convertible into qualifying securities or ordinary shares.
Under the exchange offer, the company invited the CARS holders to exchange their holding for new convertible bonds due in 2014. The new bonds have a coupon (and yield to maturity) of 4.5 per cent each and will mature on 21 November, 2014, (5 years and 1 day from date of issue).
They are convertible into fully paid-up ordinary shares of the company at Rs 605.53 a share at a fixed exchange rate – Rs 46.36 for $1 (the conversion price), which is 15 per cent higher to the closing share price of the company at launch.
In a filing to the BSE, Tata Steel said the exchange offer period had expired. The principal amount accepted for the exchange is $493 million and the new foreign currency convertible bonds to be issued would be $546.9 million.
The remaining outstanding amount for CARS is expected to be $382 million, the company said.
Mr Koushik Chatterjee, Group Chief Financial Officer, Tata Steel, said, “While Tata Steel does not have any near-term material repayment requirements over the next 12-15 months, as part of our long-term financing strategy, we continue to seek market opportunities to reduce the financing costs on a proactive basis. In line with the above, the company launched this exchange offer to exchange part or all of the existing CARS for a fresh set of convertible bonds. This not only reduces the overall finance charges for the company, but also extends the maturity of the bonds by two years. In addition, the lower conversion premium makes the exchange bonds more equity-like, which is in line with the company’s overall de-leveraging strategy.”
Sourcethehindubusinessline.com
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