Tata Motors to convert notes into equity

The company has 11.76 billion yen around US 130 million of zero coupon convertible notes due in March 2011 and another US 300 million convertible notes due in April 2011. The noteholders will have to submit applications for the auction,which is to be held during March 23-29,2010. The company said the option to convert the yen notes into ADSs or dollar notes into GDSs is not available to noteholders converting pursuant to the invitation. After the auction,the company will decide on the conversion rate and determine the final price for conversion of the yen notes and the dollar notes. This will be done in consultation with the dealer managers to the bid including StanChart,Citigroup Global Markets,Credit Suisse Singapore and JP Morgan Securities.

Shares of Tata Motors were down 2.76 per cent to Rs 739.05 on BSE on Tuesday.

It has been reducing its debt,including through sale of shares in group firms. Last year,it raised 750 million through a sale of global depository receipts and convertible bonds.