Tata Coffee to raise Rs 250 crore

Business Standard - July 14, 2006
Tata Coffee, a subsidiary of Tata Tea in which it has a majority stake, has announced that it will raise close to Rs 250 crore through partly convertible debentures.

"The company is resorting to the fund infusion to part-fund its recent acquisition of the US-based Eight 0 'Clock Coffee Company for $220 million and also for other capex plans like freeze-dried plant at Theni (Tamil Nadu) and a coffee-processing unit in Ugandan," said H Ashraff, MD, Tata Coffee.

The company, on Thursday announced that the board of directors has revised the terms and conditions of the rights issue approved earlier to raise close to Rs 130 crore.

Under the revised terms, the company proposes to issue 62.34 lakh (7 per cent) partly convertible debentures (PCDs) in the ratio of 1 debenture for every 2 equity shares held as on a record date. Each debenture will have a face value of Rs 400 and will comprise of two parts.

Part A of Rs 250 will be converted into one fully-paid equity share of Rs 10 on allotment. Part B of Rs 150 will be non-convertible and will be redeemed in equal installments of Rs 50 each at the end of fourth year, fifth year and sixth years from the date of allotment.

The non-convertible portion will carry a coupon rate of 7 per cent per annum.

Earlier, the company had proposed to raise money through a rights issue of equity shares in the ratio of two new equity shares of face value of Rs 10 each for every five existing shares held within a price band of Rs 220-260 per share (including premium) on a record date.