Mumbai, Jan 17 (PTI) Tata Steel today said that itspromoters holding in the company would come down to 2.4 percent post its follow-on public offer (FPO), scheduled to hitthe market on January 19.
"Promoters holding in Tata Steel will come down to 2.4per cent after the follow-on public offer (FPO)," Tata Steel''sChief Financial Officer, Koushik Chatterjee, told reportershere.
As on September 30 last year, promoters held a 32.48 percent stake in the company, while insurance companies andforeign institutional investors held 22.4 per cent and 15.87per cent stakes, respectively.
The company has fixed the price-band of its FPO atbetween Rs 594-610 per share which will hit the market betweenJanuary 19 to 21.
At the higher end of the price-band, the company expectsto mop-up Rs 3,477-crore and at the lower end, Rs 3,385-crore.
Of the total FPO proceeds, Tata Steel plans to use Rs1,800-crore for the expansion of its Jamshedpur facility andRs 1,000-crore for debt repayment, Chatterjee said.
The expansion work at the Jamshedpur plant, which isscheduled for completion by March this year, will augment thesteel production capacity of the plant to 10-million tonnesper annum. .
As of September 30, 2010, the company had a net debt of about USD 10.7-billion (Rs 48,790.6-crore), out of whichUSD 5.32-billion was in lieu of loans taken by the company forexpansion of its Indian operations.
The outstanding debt of the company, which has anannual steel-making capacity of 27-million tonnes, alsoincludes a part of the USD 4.58-billion loan taken by thecompany to acquire UK-based steel-maker Corus in 2007.
The world''s seventh-largest steel-maker is also opento investing a part of its proceeds in a project of Australianminer, Riversdale.
"A part of the proceeds will be at the company''s boarddiscretion to invest in projects there," he said.
On Riversdale, Chatterjee said,"our stake inRiversdale is a strategic investment and we are focusing ondevelopment of the Benga power plant project in Mozambique."
Tata Steel has appointed seven banks to manage theissue--Kotak Mahindra Bank, Citi, Deutsche Bank AG, Royal Bankof Scotland Plc, SBI Capital Markets, StandardChartered Bank Plc and HSBC Bank.