Tata Consumer Products Ltd. approved raising up to Rs 3,500 crore via debt to fund its two acquisitions.
The board approved raising of up to Rs 3,500-crore bridge financing via commercial papers, according to an exchange filing by the food and beverages arm of the Tata Group. The proceeds of this fundraise will be used to buy stakes in Capital Foods Pvt., the maker of Ching's Secret noodles to sauces; and Fabindia's Organic India.
The company also approved raising up to Rs 3,000 crore from existing investors through a rights issue later. This bridge will be repaid through a combination of the rights issue and internal accruals.
Tata Consumer has agreed to acquire the Ajay Gupta-founded Capital Foods through an all-cash deal, in a phased manner at an enterprise value of Rs 5,100 crore, according to its exchange filing on Friday. It also plans to acquire Organic India at an enterprise value of Rs 1,900 crore to create a health and wellness platform.
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