The country’s largest private sector power generation firm Tata Power Company Ltd has appointed Deutsche Bank, Goldman Sachs and UBS as joint bookrunners for a 60 year non-callable for 5 years hybrid capital offering to raise upto $400 million.
The firm proposes to raise anywhere between $300-400 million with the final size of the issue to be determined by market demand. The hybrid issue will be through a wholly owned overseas subsidiary of Tata Power and will be guaranteed by Tata Power Company Ltd.
This comes just a month after another group firm issued a hybrid instrument. Tata Steel completed a planned fund raising initiative by scooping up Rs 1,500 crore ($332 million) through a perpetual bond issue, making it the first-ever company to issue such hybrid corporate bonds in the country.
Tata Steel securities issue– managed by J.P. Morgan Securities India Pvt Ltd and ICICI Bank Ltd– that rank senior to only share capital of the firm, are perpetual in nature with no maturity or redemption and are callable only at the option of the firm.
“The issuance of these perpetual hybrid securities is an important step in the overall financing strategy and capital structure management of the Tata Steel Group,” chief financial officer Koushik Chatterjee had said last month. As Tata Steel continues to develop and execute its significant and earnings accretive growth plans, this innovative long term funding with equity features but without the associated economic dilution helps us to diversify our financing options, he said.
Earlier, Tata Steel had raised around $770 million through a follow on public offering, part of which was from anchor investors including world’s largest sovereign wealth fund Abu Dhabi Investment Authority and that sponsored by the government of Singapore.