Mumbai, Oct 27: Hospitality major Indian Hotels Co Ltd (IHCL) will raise Rs 2,200 crore through a mix of rights and warrants issues.

Raymond N Bickson, managing director, IHCL said, “The re-worked draft offer document to raise the money has been submitted already (to Sebi). We are expecting the approvals to come in another 2-3 weeks from now. Overall we are looking at raising approximately Rs 2,200 core. The proceeds will be utilised to fund our existing and future expansion.”

Earlier, on September 27, the management had decided to modify one of the two instruments comprising the rights issue.

According to the new document, the company will now make two simultaneous, but unlinked, rights issues of equity shares to be offered to the shareholders in the ratio of 1:5 at a price of Rs 70 per share (of the face value of Rs 1 each). This is expected to increase the equity capital by Rs 12.06 crore (over the present capital of Rs 60.29 crore) and will raise Rs 844 crore.

In place of the proposed issue of 4% fully convertible debentures, the management now intends to make a rights issue of 6% non-convertible debentures (NCD) of the face value of Rs l00 each in the ratio of 1 NCD for every 10 equity shares held, with each NCD having a detachable warrant, which would give the holders the right to purchase 1 equity share of the company at a price in the range of Rs 130 and Rs 150 per share. This right would be exercisable not later than 12 months from the date of allotment.

The NCDs, with a maturity of three years, would raise Rs 600 crore and a further Rs 780-900 crore (depending on the price to be fixed) would be raised when the warrants are exercised. The increase in capital from this modified instrument is expected to remain unchanged at Rs 6 crore.

Said Anil P Goel, IHCL CFO, “The rights issue should be out by the end of January 2008 and we should raise the money in another couple of months from there. Raising the warrants sum will be done over a span of 12 months from completing the rights issue.”