MUMBAI (Commodity Online): Tata Steel Ltd (BOM: 500470) traded in red even as the company today announced the approval of an exchange offer for existing securities into foreign currency convertible bonds (FCCB).

The company today made an announcement that a committee of the board it has approved an exchange offer for an existing USD 875 million securities into FCCBs to reduce the company's future debt obligations.

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A committee of the board has approved a new foreign currency convertible bonds (FCCBs) in exchange for any or all the existing $875 million convertible alternative securities (CARS) due 2012, Tata Steel said in a regulatory filing.

The company is making the exchange offer in order to lengthening its debt maturity profile, reducing the cost to the issuer and potentially reducing future repayment obligations. The new FCCBs would mature in November 2014, while the CARS were due in 2012.

The FCCBs are convertible into fully paid-up ordinary shares of Tata Steel at Rs 605.53 per share, a premium of more than 15 per cent over the closing price on November 11, at a fixed exchange rate of Rs 46.36 to the dollar, Tata Steel said.

The company stocks traded with loss of over 2% in the morning trading hours today at Rs.515. The stock has tanked by over 5.5% over past one month.

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