Tata holds auction to convert 0% yen notes, 1% dollar notes into stock

By Susanna Moon

Chicago, March 23 - Tata Motors Ltd. said holders may submit applications in an auction to convert the outstanding ¥11.76 billion of zero-coupon convertible notes due March 2011 and $300 million of 1% convertible notes due April 2011.

The auction to convert the notes into shares only began on March 23 and will end at noon ET on March 29.

The zero-coupon notes are normally convertible into shares or American Depositary Shares, and the 1% notes are convertible into shares or Global Depositary Shares.

Noteholders will receive shares upon conversion of the notes at enhanced conversion ratios based on the price options and volume-weighted average price upon submission during the auction period of a valid application selecting at least one price option.

The yen note options are 105.2082%, 106.2007% or 107.1932% of par, against the current redemption value of 99.253%.

The dollar note options are 130.38%, 131.61% or 132.84% of par, against the current redemption value of 121.78%.

"The invitation is aimed at further optimizing the capital structure of the company. Conversion by the noteholders will strengthen the company's capital and reserves and will help deleverage its balance sheet," according to a company press release.

Tata Motors is a Mumbai, India-based car manufacturer.

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