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Tata Power’s INR 2,000 Crore rights issue to open on 31 March

<p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Tata Power Co. Ltd&rsquo;s rights issue worth almost INR 2,000 crore will open on 31 March and the proceeds will be utilised for capital expenditure and repaying debt. The company will offer 33.22 crore equity shares with a face value of INR 1 each for cash at INR 60 a share (including a premium of INR 59) for an aggregate amount of up to INR 1,993.38 crore to existing investors.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">The issue will close on 15 April, according to Tata Power&rsquo;s offer document filed with market regulator Security and Exchanges Board of India (Sebi). Every investor holding 50 shares will be eligible to buy seven shares of the company.</span></span></span><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"> Tata Power will extend INR 639.51 crore from the funds raised to Coastal Gujarat Power Ltd, the operator of the 4,000MW Mundra ultra mega power project in Gujarat, for part repayment of borrowings, according to the offer document.</span></span></span><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"> About INR 533 crore from the net proceeds will be used to partly repay certain borrowings of Tata Power.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">The company&rsquo;s total long-term outstanding indebtedness from banks and financial institutions stood at INR 9,091.77 crore at the end of December 2013. Tata Power has earmarked INR 300 crore for generation, transmission and distribution of electricity in the Mumbai licence area, while INR 498.35 crore would be used for general corporate purposes, it said.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">JM Financial Institutional Securities, BNP Paribas SA, HSBC Securities and Capital Markets (India), Kotak Mahindra Capital Company and SBI Capital Markets are the lead managers to the issue. Link Intime India is the registrar. Tata Power has an operational capacity of more than 8,560MW while over 840MW of projects are being set up, according to the document. The company reported a consolidated net loss of INR 74.91 crore in the three months ended December 2013, when total income from operations touched INR 8,700.02 crore.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Source-On Request</span></span></span></p>