Tata Steel to launch $500 million GDR issue in six months: reports
29 March 2010
Tata Steel, the largest producer of steel in the country, has plans to tap the global depository receipt (GDR) market for raising at least $500 million (Rs 2,300 crore).
According to a Business Standard report, the money sought to be raised within the next two quarters, will go toward capitalising the balance sheet, according to bankers familiar with the development.
The company had raised $500 million for the expansion of its Jamshedpur unit about eight months. The company is engaged in building capacity there to 9.7 MTPA by December 2011 from the current 6.8 MTPA.
Tata Steel had a gross debt of $12.9 billion (Rs58,500 crore) in the quarter ended 31 December, accumulated mostly with the acquisition of Anglo-Dutch steel maker Corus, for $12.1 billion in 2007, the largest acquisition abroad by any Indian company. The company now has plans to shrink the gross debt by $2 billion (Rs9,000 crore) in multiple tranches over the next two years.
According to a banker familiar with the development, the report said, the next round of fund raising was in discussion stage currently and the company wanted to take a gradual approach for raising Rs5,000 crore, almost half of which is going to take place in the next six months.
In August last year, L&T passed an enabling resolution to raise Rs5,000 crore by way of equity issuances without giving any timeline or preferred mode for issuance.