The board of directors of the company have approved the issue of equity shares in 1:5 ratio, wherein one equity share of Rs 300 each would be alloted for every five shares held, raising an amount of Rs 3,654 crore, the company said.

Further, the company would allot Cumulative Convertible Preference Shares (CCPS) of Rs 100 each to the existing shareholders, convertible into equity shares of Rs 10 each, with an indicative conversion price in the range of Rs 500 to Rs 600 per share for raising a total amount of up to Rs 6,000 crore.

The Committee of Directors at its meeting on Friday, approved the allotment of CCPS of Rs 5,481 crore in the ratio of 9:10 to the existing equity shareholders on rights basis. Six Cumulative Convertible Preference Shares of the face value of Rs 100 each would be automatically converted into one share of Rs 600 each on September 1, 2009.

No redemption
There would, however, be no redemption of Cumulative Convertible Preference Shares. On conversion CCPS into equity shares, the equity share capital would stand increased at 82.21 crore shares of Rs 10 each. Tata Steel had completed the Corus acquisition on April 2, 2007 at a price of 608 pence per ordinary share in cash.