Mahindra to raise Rs 700 cr through FCDs

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Mumbai, May 3:: Automobile major Mahindra & Mahindra is planning to raise Rs 700 crore by issuing fully and compulsorily convertible debentures to an entity owned by Goldman Sachs, the global financial service major.

The company will utilise the amount raised through the preferential offer for its auto and tractor business, a company release said on Saturday.

The company would be seeking shareholders' approval for the issue through a postal ballot. It would issue 93.95 lakh unsecured fully and compulsorily convertible debentures at the face value of Rs 745 each aggregating to little over Rs 700 crore.

Each FCD, which carries interest rate of 9.25 per cent per annum would be convertible into one equity share of Rs 10 each at a price of Rs 745 including a premium of Rs 735, anytime within 18 months from the date of allotment at the option of investor.

FCDs are anyway mandatorily convertible into equity share on the date falling 18 months from the date of allotment. The company said the issue price is at a premium of 7.91 per cent to the closing price of Rs 690.35 traded on the BSE on May 2.

With this investment, Golboot Holding, the entity owned by Goldman Sach will own 3.68 per cent of the post issue paid up equity share in the company.