Indian Hotels Fixes Rights Issue Price at Rs 55 Per CCD

Indian Hotels Company, which plans to raise Rs 1,000 crore by way of rights issue, on Tuesday fixed the price at Rs 55 per compulsory convertible debenture (CCD).

The Rights Issue Committee of the Tata group firm has finalised the terms and conditions of the CCDs to be issued in the rights issue and has decided on a issue price of 'Rs 55 per CCD of the face value of Rs 55 each', Indian Hotels Company Ltd (IHCL) said in a filing to the BSE.

The CCDs are to be issued to the existing shareholders of the company for an 'amount not exceeding Rs 1,000 crore', it added.

The committee has also decided on the entitlement ratio of 9 CCDs for every 40 equity shares of the company, IHCL said.

"1 CCDs of the face value of Rs 55 each will be automatically and compulsorily converted into 1 equity share fully paid up of Re 1 each at a premium of Rs 54 after 18 months from the date of allotment of CCDs (the conversion date)."

Earlier, the hospitality major had sought approval of the Securities and Exchange Board of India to raise Rs 1,000 crore through issue of debentures on rights basis.

IHCL intends to utilise part of the proceeds from the issue towards capital expenditure proposed to be incurred by the company for construction of Vivanta by Taj in Guwahati.

Besides, the firm would use the funds for repayment or pre-payment of certain borrowings, funding of capital expenditure related to renovation proposed to be undertaken at some of its hotels as well as for general corporate purposes.