Companies

Tata Power to raise $300-400 m

| | Updated on: Apr 18, 2011
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Tata Power has said that it proposes to raise $300-400 million (Reg S) hybrid capital for a tenor of 60 years. The instrument is non-callable for five years.

Reg S denotes the regulation of the Securities and Exchange Commission of the US that permits companies to not register stock they sell outside the country to foreign investors.

Tata Power has appointed Deutsche Bank, Goldman Sachs and UBS as book-runners for a 60-year non-callable for five years Reg S hybrid capital. The market demand will determine final size of the offering, it said.

The offering will be undertaken through a wholly owned overseas subsidiary of Tata Power and guaranteed by the latter.

Mr S. Ramakrishnan, Executive Director (Finance), said: “This long-term financing enhances our ability to achieve our strategic goals of securing sustainable sources of supply for our rapidly growing power generation base.”

Tata Power plans to expand generation capacity through new power projects or acquisitions. These funds could be utilised to secure long-term coal supplies by investing in coal mines or assets outside India and for repayment of loans.

In a communication to the stock exchanges on Monday, Tata Power said the terms of transaction would be announced later.

Tata Power's Rs 10 shares were marginally down on the NSE at Rs 1,303.

Earlier, Tata Steel raised Rs 1,500 crore through perpetual hybrid bonds. The bonds do not have maturity or redemption dates. Tata Steel also announced a coupon of 11.8 per cent per annum if the call option is not exercised after 10 years.

Published on April 18, 2011

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