M&M To Use FCCB Proceeds For Acquisitions, Expansion

Mumbai, April 29 | Updated: Apr 30 2004, 05:30am hrs
Mahindra & Mahindra (M&M) plans to utilise the proceeds from its $100 million foreign currency convertible bond (FCCB) offering to tap possible acquisitions and expansion opportunities.

This includes the auto components business which the company plans to tap in a big way. Addressing an extra-ordinary general meeting (EGM) of shareholders in Mumbai, M&M chairman Keshub Mahindra said: The bonds will be quoted in Singapore. We have obtained the approval of the financial institutions for the offering.

He added that the equity dilution on account of the offering would be less than 8 per cent. M&M sold 117,402 vehicles in the last fiscal as against 86,890 vehicles in 2002-03, which signifies a 35 per cent volume growth.

Three-wheeler volumes have also increased by 73 per cent in the last fiscal, Mr Mahindra added. The tractor industry, which had been going through a bad phase also witnessed a recovery of sorts. M&M saw a 5 per cent growth at 49,576 tractors in 2003-04 as against 47,028 units in 2002-03. We have undertaken cost restructuring which will result in significant savings, Mr Mahindra added.