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Tata Engineering to raise Rs 1,307 cr to fund debt prepayment investment
Our Markets Bureau
Hyderabad, April 2: Tata Engineering and Locomotive Company Ltd (Telco), the largest commercial vehicle manufacturer, has finalised proposals to invest Rs 780 crore in the next three years in the areas of commercial vehicles, passenger cars including towards capital expenditure. The company has further plans to bring down the cost of borrowings, by way of pre-paying the debt/bonds to the tune of Rs 527 crore. To part finance both the activities, the company plans to raise funds to the extent of Rs 1,307 crore through debenture issue on the rights basis. The company has recently submitted the draft letter of offer to the stock exchanges.As per the scheme, the company will raise Rs 410 crore through convertible debentures (assumed face value of Rs 80 per CD), Rs 512 crore through non-convertible debentures and about Rs 307 crore through an issue of warrants. The balance will be funded through internal accruals, said the sources. At present, Telco has Rs 400 crore authorised capital and pre-issue paid up capital of Rs 255.85 crore. After the issue the paid up capital will increase to Rs 307.03 crore, according to the draft offer letter. While the company plans to enhance the export share under commercial vehicles to the regulated markets such as Australia and Europe, it intended to expand its presence in the passenger vehicle segment. A major portion of the amount has been earmarked to the development of vehicles and brand building exercise. Telco currently has three automobile manufacturing plants located at Jamshedpur, Pune and Lucknow. Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
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