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Tata Sponge to seek EGM nod to raise fund

Steel News - Published on Fri, 14 Dec 2018

Image Source: Economic Times
Economic Times reported that Tata Sponge Iron has called an extraordinary general meeting on December 14 to seek approval for issue of preference shares on private placement basis to its promoter Tata Steel for up to INR 1,000 crore. Tata Steel recently announced TSIL as its vehicle for acquisition of Usha Martin’s steel business in a deal size of INR 4,300 to INR 4,700 crore. The transaction, which will mark TSIL’s entry into the steel sector, was approved by the Competition Commission of India.

TSIL had, in an earlier notification to the exchanges, said it would raise capital through a combination of a rights issue of Rs 1,800 crore, external borrowings up to Rs 2,500 crore, apart from the NCRPS to fund the acquisition. In its EGM notice, TSIL has said it proposes to issue, offer and allot non-convertible redeemable preference shares (NCRPS) at a coupon of 11.30 per cent on a private placement basis to Tata Steel.

TSIL would also seek an increase in borrowing limits at the EGM, besides creation of charges, an increase in authorised share capital and a consequent amendment of capital clause in the memorandum and Articles of Association of the company.

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Posted By : Ratan Singh on Fri, 14 Dec 2018
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