The Board of Directors of Mahindra & Mahindra Limited, at its meeting held on 3rd May 2008, have approved raising additional resources through issuance of 9,395,974, 9.25% p.a. unsecured fully and compulsorily convertible debentures (FCDs) of the face value of Rs.745 each, aggregating Rs 7,000,000,630, to Golboot Holdings Limited, an entity controlled by Goldman Sachs.
Each FCD will be convertible 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 Chapter XIII of the Securities and Exchange Board of India (Disclosure & Investor Protection) Guidelines, 2000.
The FCDs shall be convertible into equity shares at anytime within 18 months from the date of allotment of FCDs at the option of the investor, and mandatorily convertible into equity shares on the date falling 18 months from the date of allotment.
The issue price represents a premium of over 7.91% to the closing price of Rs 690.35 per share traded on Bombay Stock Exchange Limited on 2nd May 2008. With this investment, Golboot Holdings Limited shall own 3.68% of the post issue paid up equity share capital of the Mahindra & Mahindra Limited.
The company will utilise the amount raised through preferential offer, towards its auto and tractor businesses. Kotak Mahindra Capital Company Limited was the exclusive financial advisor for the above transaction.