The company, at its board of directors meeting held today, approved to issue 93,95,974 FCDs having face value of Rs 745 aggregating to Rs 700 crore. Each FCD is convertible into one equity share of Rs 10 each at a price of Rs 745 per share.
All FCDs shall be convertible into equity shares at anytime within 18 months from the date of allotment of FCD at the option of Golboot Holdings and mandatorily convertible into equity shares on the date falling 18 months from the date of allotment.
Golboot Holdings, upon conversion, will hold 3.68% of the equity share capital of M&M. The issue price represents a premium of over 7.91% to the closing price of Rs 690.35 per share traded on Bombay Stock Exchange on 2 May, 2008.
The company will utilise the amount raised towards its auto and tractor businesses. Kotak Mahindra Capital Company was the financial advisor for the above transaction.
Early this week, Vice Chairman of the group Anand Mahindra said, that the company was looking to raise capital through private placement of securities as the firm was scouting for new sources of funds to help fund its overall growth plan which includes company buy-outs.
The company is investing about Rs 4,000 crore in the Chakan plant of Pune for setting up a green field facility. The funds will also be utilised to development of all of the future models to be launched by the company. The facility which is slated to go on stream by January 2010 will have an initial capacity to produce 300,000 units a year.
