Tata Consumer to raise Rs3,500 crore to fund Capital Foods, Organic India acquisitions
"Tata Consumer Products will raise bridge financing of up to Rs 3,500 crore via Commercial Paper to fund the recently announced transactions. This bridge will be repaid through a combination of a rights issue (equity) of up to Rs 3,000 crore and internal accruals," said a statement issued by TCPL.
New Delhi: Tata Consumer Products Ltd (TCPL) on Friday said it will raise Rs 3,500 crore in debt to fund its recent acquisitions of Capital Foods and Organic India.
The board of the company in a meeting on Friday approved the "raising of funds through the issuance and allotment of Commercial Papers, for an amount not exceeding Rs 3,500 crore," to be utilised for bridge funding to facilitate the payment for the two proposed acquisitions, said Tata group FMCG arm in a regulatory filing.
Last week, TCPL announced the acquisition of Capital Foods, which owns brands like Ching's Secret and Smith & Jones, at an enterprise valuation of Rs 5,100 crore and Fab India-backed Organic India, which operates in the health and wellness category, at an enterprise value of Rs 1,900 crore.
"Tata Consumer Products will raise bridge financing of up to Rs 3,500 crore via Commercial Paper to fund the recently announced transactions. This bridge will be repaid through a combination of a rights issue (equity) of up to Rs 3,000 crore and internal accruals," said a statement issued by TCPL.
The board has also approved raising of fund by way issue of equity shares of the Company of face value Re 1 each through Rights Issue for an amount not exceeding Rs 3,000 crores to the eligible equity shareholders of the Company as on the record date.
The Tata Group arm TCPL will acquire 100 per cent equity shares of Capital Foods, which owns brands like Ching's Secret and Smith & Jones, at an enterprise valuation of Rs 5,100 crore.
TCPL will also acquire Organic India, which operates in the health and wellness category, at an enterprise value of Rs 1,900 crore.