The Tata Group Controlled, Indian Hotels Company [Taj Mahal Brand of Hotels] announced during the market hours today, 13 August 2007 that the board of directors of the company has decided to make a rights offer of two simultaneous but unlinked issues to the shareholders of the company.
The rights issue of equity shares is in the ratio of 1:5 (1 share for every 5 shares held ) at a price of Rs 70 per share. The company will raise Rs 844 crore through this issue.
The second rights issue is in the ratio of 1:10 of a 5-year 4% unsecured convertible debentures of the face value in the range of Rs 150 to Rs 180 convertible after 2 years at a conversion price in the range of Rs 150 to Rs 180 into equity shares of the company. The amount raised through this issue would be in the range of Rs 900 crore to Rs 1080 crore.
The objective of the two issues is to meet the company’s long term financing needs for capital expenditure and growth plans, including possible acquisitions