The board of Tata Consumer, a leading FMCG company, has given the green light to a fundraising initiative amounting to Rs 6,500 crore. The funds will be utilized to finance the recent acquisitions of Capital Foods and Organic India through a combination of commercial papers and a rights issue.
The company announced its plans to raise capital, with a targeted amount of up to Rs 3,500 crore, through the issuance and allotment of commercial papers. This fundraising is aimed at establishing bridge funding to ensure the execution of the acquisition of stakes in both Capital Foods Private and Organic India, as per a report by the Economic Times.
Apart from the issuance of commercial papers, the FMCG firm aims to secure an additional Rs 3,000 crore by issuing equity shares via rights issues. The amount will be made available to eligible equity shareholders of the company.
The specific details of the rights issue, such as the issue price, rights entitlement ratio, record date, timing, and payment terms, will be disclosed at a later date.
Tata Consumer, in a move last week, finalized definitive agreements for the complete acquisition of Capital Foods, which owns brands like Ching's Secret and Smith & Jones, and Organic India, a health products and organic teas manufacturer supported.
TCPL is set to acquire 75 per cent of Capital Foods, with the remaining 25 per cent to be bought over the next three years. The valuation for the complete stake in Capital Foods is estimated at Rs 5,100 crore.