Hindalco backs down, sets rights issue price at Rs.96
Hindalco has finally declared the pricing and structure of it’s forthcoming rights issue. Instead of the 1:3 ratio proposed earlier in June, the company has fixed the ratio at 3:7, which means shareholders are eligible to get three shares for every seven held. Secondly, the company has backed down from pricing it around the Rs.122-Rs.125 mark, and opted to set the price at Rs.96 per share.
The record date has been fixed as 05-Sep-08.
Hindalco expects to raise around $1 billion (Rs.4,200 crore)from this rights issue. This will be used to repay a part of the $3.03 billion bridge loan it took while buying Canadian company Novelis for $6 billion in February 2007. The remainder will funded through debt and other instruments.
This is the second rights issue from the company in the last two years. At the time it had offered shares at Rs.96 at a 1:4 ratio, payable in three parts over two years, Rs.24/share on application, Rs.24/share after the first year, and the balance Rs.48 after two years.
It is quite likely they may adopt a similar payment method this time around as well.
September 1st, 2008
[...] 25, 2008Filed Under Stocks | In a unique move, Hindalco Industries, which is coming out with a rights issue next month, has got half the issue underwritten. So what does it mean? Well, in case the issue is [...]
October 2nd, 2008
[...] However, with the markets sinking everyday, the stock will anyway be available at the rights price, which is a situation also being faced by Hindalco, who’s current market price is the same as that in it’s rights issue. [...]
October 12th, 2008
[...] on October 11, 2008Filed Under Rights Issue, Stocks | The recent rights issues from Hindalco and Tata Motors have landed in hot soup following the meltdown in their stock prices in this [...]