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Bangalore, March 24

McDowell and Company has concluded an offering of GDS amounting to $130 million at a price of Rs 660 per share and another $100 million through the FCCB route.

The UB Group Chief Financial Officer, Mr Ravi Nedungadi, told newspersons on Friday that the funds raised through these offerings is expected to be around Rs 1,050 crore ($230 million). He said out of this amount, nearly Rs 900 crore will be used towards repaying part of the debt incurred to finance the Shaw Wallace acquisition. The debt portion will get reduced to around Rs 450 crore. The GDS will be listed at the Luxembourg Stock Exchange.

Funds to repay debt

"The funds raised from the twin issues of GDS and FCCBs will be partly utilised towards repaying a portion of debt incurred to finance the Shaw Wallace acquisition, which will go a long way in de-leveraging the company's balance sheet," Mr Nedungadi said. The GDR issue opened on March 22 while the FCCB issue opened on March 23 and both their prices were frozen on Friday.

The price of the GDS has been fixed at $7.4274 per GDS with two shares comprising one equity share at a price of Rs 660 per equity share of Rs 10 each. This price is at a 1.04 per cent premium to the average closing price of the company of the past five trading days. The GDS issue was oversubscribed by almost two times. CLSA Asia-Pacific Markets acted as the sole global coordinator and book runner for this offering.

The FCCBs are optionally convertible into GDS/local shares at a premium of 30 per cent to Rs 660. The FCCBs have a coupon of two per cent per annum payable in arrears semi-annually and an YTM of 6.65 per cent.

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(This article was published in the Business Line print edition dated March 25, 2006)
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