Date:21/04/2007 URL: http://www.thehindubusinessline.com/2007/04/21/stories/2007042105150200.htm

M&M raising Rs 1,350 cr for expansion

Our Bureau

Mumbai April 20 Mahindra & Mahindra (M&M) proposes to raise up to Rs 1,350 crore to finance capacity expansion and development of new products.

The fund will be raised though overseas issues and qualified institutional placements (QIPs).

The board of directors on Friday approved $300 million overseas issue (either global depository receipts and foreign currency convertible debentures) with an option to retain 15 per cent additional subscription.

The board has also approved raising Rs 900 crore through one or more tranches of QIPs, the company said in notice to the stock exchanges.

M&M will be seeking shareholder approval for the proposal through postal ballot.

The company has also decided to increase its borrowing limit to Rs 6,000 crore from Rs 2,500 crore.

At an EGM today, shareholders approved a proposal to this effect.

The meeting also approved enhancing the investment limit by Rs 1,500 crore.

According to the company, the funds are being raised to invest in R&D, new product development, balancing equipment, capacity expansion and absorption of new technology to sustain growth and maintain leadership in the company's core business.

Similar investments are expected to be made in joint ventures and acquisitions.

M&M has tied up with auto majors such as Renault-Nissan, France and International Truck and Engine Corporation, US in the past 2-3 years and will need fresh investments.