30 March, 2010
As announced earlier, Tata Motors had offered bondholders of their 0% JPY 11,760 million and 1% USD 300 million Convertible Bonds an option to convert their bonds into Ordinary Shares during a 5-day period from March 23 to March 29, 2010. In this period, bondholders could opt to receive a higher number of shares per bond. Bondholders, who did not participate, would continue with all the terms of their bonds prior to this one-off offer.
The offer has met with great success with bondholders representing 93% of the JPY bonds and 76% of USD series bonds respectively, opting to convert their bonds into Ordinary Shares. The company was able to extinguish debt worth USD 345 million of these bonds at current exchange rates.
As a result of the above offer, the company has today allotted 26.64 million equity shares to the bondholders, who exercised the option to convert these bonds into Ordinary Shares during the offer period.
The offer, managed by Standard Chartered Bank, Citigroup, Credit Suisse and J.P. Morgan, has helped improve the company’s net worth, reduce indebtedness and enhance financial flexibility.
Mr. C. Ramakrishnan, Chief Financial Officer, Tata Motors, said, ‘The reduced conversion price option made eminent sense from bondholders’ perspective, who got additional value by opting to convert into equity. From the company’s perspective, this exercise is in line with its continued efforts to deleverage its balance sheet.’