Tata Consumer Products Targets Rs 3,500 Crore Debt to Fund Capital Foods, Organic India Buys

20 Jan 2024 , 10:12 AM

On Friday, Tata Consumer Products Ltd. (TCPL) announced that it would issue a loan of Rs 3,500 crore in order to finance the recent acquisitions of Organic India and Capital Foods. In a meeting on Friday, the company’s board approved the ‘raising of funds through the issuance and allotment of Commercial Papers, for an amount not exceeding Rs 3,500 crore,’ which will be used as bridge funding to make the two proposed acquisitions’ payments easier to make, according to a regulatory filing from the FMCG arm of the Tata group.

The acquisition of Capital Foods, which owns brands including Ching’s Secret and Smith & Jones, at an enterprise valuation of Rs 5,100 crore, and Organic India, a health and wellness company supported by Fab India, at an enterprise value of Rs 1,900 crore, were announced by TCPL last week.

‘To finance the newly disclosed deals, Tata Consumer Products plans to use commercial paper to raise bridging financing of up to Rs 3,500 crore. Internal accruals and a rights issue (equity) of up to Rs 3,000 crore will be used to pay for this bridge, according to a TCPL statement.

Additionally, the board has approved raising funds through the rights issue of equity shares of the company with a face value of Re 1 each, up to a maximum of Rs 3,000 crores, to the qualified equity shareholders of the company as of the record date.

At an enterprise value of Rs 5,100 crore, the Tata Group company TCPL will purchase all of the equity shares of Capital Foods, which is the parent company of Smith & Jones and Ching’s Secret.

Additionally, Organic India, a company in the health and wellness sector, would be acquired by TCPL for an enterprise value of Rs 1,900 crore.

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