Tata Steel to raise Rs5,000 crore via bond issue
11 August 2009
Tata Steel, the country's top private sector steelmaker and the world's sixth biggest, will seek shareholders' approval for raising Rs5,000 crore through issue of bonds, as part of its Rs40,000-crore capex programme, reports CNBC-TV18.
Tata Steel had, last month, raised long-term funds to the tune of Rs2,390 crore ($500 million) via a GDR issue.
The company had, in its annual report, had also detailed plans to issue bonds either in the domestic or the international market. A resolution regarding the equity sale would be placed before the shareholders at the forthcoming annual general meeting on 27 August.
"The proposed resolution seeks the enabling authorisation of the members of the board to raise additional funds for an amount not exceeding Rs5,000 crore," the company said in its annual report.
The bond issue is aimed at reducing the group's debt, including that of the Anglo-Dutch unit Corus. The Tata Steel Group has a net debt of about Rs43,000 crore ($9 billion), including the bridge loans taken to acquire Corus in 2007.
Tata Steel Europe, the group's European subsidiary, has already restructured covenants on previous non-recourse loans taken for Corus. Tata Steel has to inject about Rs2,890 crore (about £425 million) into Tata Steel Europe, in a phased manner, as agreed to in the covenant reset package.