IT firm Tech Mahindra on Wednesday said it is planning to pay back about Rs 1,000 crore (Rs 10 billion) debt for which it is issuing shares on a private placement basis.
"We have Rs 2,200 crore (Rs 22 billion) odd debt which we took to acquire a stake in Satyam... the purpose we are taking this QIP is to retire the high cost debt. My sense is that we are looking at retiring between Rs 500 crore (Rs 5 billion) and Rs 1,000 crore (Rs 10 billion) of debt," the newly appointed CEO of Tech Mahindra, Sanjay Kalra, said in an interview to TV channel CNBC TV18.
On Tuesday, the Tech Mahindra board had approved the issue of 1.36 crore (13.6 million) shares by way of private placement or Qualified Institutional Placement basis.
"We have asked for about up to 10 per cent which is about a 1.35 crore (Rs 13.5 million) shares, but eventually what we get depends on what is the price," he added.
Earlier in April, Tech Mahindra won the race to acquire 31 per cent stake in Satyam Computer for Rs 1,756 crore (Rs 17.56 billion). The acquisition is expected to bring Tech Mahindra in the league of the top five IT firms.
In addition to that, it would pay Rs 1,134 crore (Rs 11.34 billion) to buy another 20 per cent of the company in an open offer to shareholders, which opened on June 12 and will close on July 1.
The company, however, did not disclose at what price the shares would be allotted for raising the funds.
Shares of Tech Mahindra closed at Rs 761, up 1.81 per cent, after touching an intra-day high of Rs 778 on the BSE.
