The Tatas are close to consolidating their shareholding in Steel Strips Wheels through a planned move that could profit the conglomerate`s key companies, Tata Steel and Tata Motors, reports Economic Times.
The Tatas, who own 10% in Steel Strips through investment company Kalimati Investment, could see their shareholding rise to 13.5% after conversion of the optionally convertible bonds (OCB) issued earlier to Tata Capital, another group company.
The bonds worth Rs 200 million were issued in July on a preferential basis. It is learnt that it is a strategic alliance between the two and doesn`t imply that the Tatas are planning to buyout Steel Strips.
As per terms of the agreement between Tata Capital and Steel Strips during the issue of the OCBs, the bonds can be converted into equity shares within 18 months from the date of issue.
Half of the bonds issued could be converted at the option of Steel Strips and the remaining at the option of Tata Capital. Steel Strips retains the first right to exercise its option.
Shares of Tata Motors closed up Rs 3.95, or 2.91%, at Rs 140. The total volume of shares traded at the BSE was 427,236 (Wednesday).
|
