Taj Group owner Indian Hotels modifies its rights issue plans

The Indian Hotels Company Ltd has informed the Stock Exchange, Mumbai (BSE) that its board of directors has approved the draft of the offer document to be filed with the SEBI in a meeting on 27 September, but has decided to modify one of the two instruments comprising the rights issue.

The modified proposals is that the company will make two simultaneous but unlinked rights issues. There will be no change in the rights issue of equity shares to be offered to shareholders in the ratio of 1:5 at Rs 70 per share (of the face value of Rsl each). This issue will increase the company''s equity capital by Rs12.06 crore, from Rs60.29 crore to Rs72.35 crore. Altogether, the issue will raise Rs844 crore.

In place of a proposed issue of four per cent fully convertible debentures announced earlier, it is now proposed to make a rights issue of six per cent non-convertible debentures (NCDs) of the face value of Rsl00 each in the ratio of one NCD for every 10 equity shares held.

Each NCD would have a detachable warrant that would give the holders the right to purchase one equity share of the company at Rsl30 to l50 per share. This right is exercisable not later than 12 months from the date of allotment. The exact price of the shares when the option is exercised and the specific period will be fixed at the time of the actual issue.

The NCDs, with a maturity of three years, would raise Rs600 crore and a further sum of Rs780 to 900 crore (depending on the price to be fixed) would be raised when the warrants are exercised. The increase in capital from the new NCDs would remain at Rs6 crore, as proposed earlier.