Indian Hotels Board approves rights issue

Indian Hotels Company Ltd has announced that the Board of Directors of the Company at its meeting held on August 13, 2007, has decided to make a Rights Offer of two simultaneous but unlinked issue to the shareholders of the Company, namely:

1. A Rights Issue of Equity Shares in the ratio of 1:5 at a price of Rs 70/- per share; the total amount involved would be Rs 844 crores.

2. A Rights Issue in the ratio of 1:10 of a 5-year 4% Unsecured Convertible Debentures of the face value in the range of Rs 150/- to Rs 180/- convertible after 2 years at a conversion price in the range of Rs 150/- to Rs 180/- into Equity Shares of the Company. The exact terms of this Convertible Debentures Issue would be determined at the time when the issue is actually to be made and depending on these terms, the amount involved would be in the range of Rs 900 crores to Rs 1080 crores.

The objective of the aforementioned two Issues are to meet the Company's long term financing needs for capital expenditure and growth plans, including possible acquisitions.

These Rights Issues would be subject to such approvals as may be required and a separate Book Closure date will be fixed for the entitlement to these issues will be made in due course.

Source : Equity Bulls

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