The decision was taken by the Board of Directors of M&M at its meeting held here on Saturday said an company statement issued here.

Accordingly, the company will issue as many as 93,95,974 unsecured FCDs of the face value of Rs 745 each aggregating over Rs 700 crore to an associate company of Goldman Sachs. M&M will utilise the amount raised through preferential offer towards its auto and tractor businesses, it said.

Each FCD convertible mandatorily into one equity share of Rs 10 each in the company at a price of Rs 745 per share  — including premium of Rs 735 per share) in accordance with Sebi Guidelines, 2000 — within 18 months from the date of allotment of FCDs at the option of the investor.  These carry a coupon rate of 9.25 per cent per annum. With this investment, Goldman Sachs’s associate company shall own 3.68 per cent of post-issue paid-up equity share capital of the company. Kotak Mahindra Capital was the exclusive financial advisor for the said transaction.