Tata Steel has subscribed to 2.58 crore rights equity shares of Tata Sponge Iron Ltd at an issue price of Rs 500 per share totalling to Rs 1,292.2 crore.
The price includes a premium of Rs 490 per rights equity share.
"This is not a related party transaction as it is a subscription to equity shares of Tata Sponge Iron Ltd (TSIL) pursuant to TSIL's rights issue and does not involve any sale or purchase of shares," Tata Steel said in a statement.
TSIL is a subsidiary of Tata Steel and has allotted the rights equity shares to the company pursuant to the rights issue. "The allotment is in done at arm's length and is compliant with the applicable laws," said the statement.
TSIL announced the rights issue with the primary objective of repaying or pre-paying or redeeming the debt of TSIL and for general corporate purposes. Tata Steel, being a promoter company of TSIL, supports this objective and accordingly subscribed to the rights issue.
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