Tata Steel board approves funding plan for Corus

Mumbai: Tata Steel will sell equity shares worth $2.3 billion in domestic and overseas markets, besides $6.1 billion in debt to fund acquisition of Anglo-Dutch firm Corus Group Plc.

The board of directors of the company cleared a host of proposals, including a rights issue, a convertible preferential shares issue and an overseas equity-related issue to raise a total of $12.9 billion.

The company would raise $4.1 billion in equity and $6.14 billion in long-term debt from banks. It will arrange $2.66 billion through a mix of quasi-equity and capital funding at its subsidiary Tata Steel Asia Singapore.

Tata Steel, which won the take-over battle for Corus in January, said the net cost of the acquisition would be $12.9 billion.

The acquisition, which catapulted Tata to the world''s fifth-largest steel producer, is funded by equity of $4.1 billion and $6.14 billion in long-term debt from a consortium of banks.

The remaining $2.66 billion has been raised in bridge finance, the company said.

The company said it would raise Rs3,655 crore ($872 million) through a rights share issue. One rights share will be offered at Rs300 for every five shares held. It also plans to raise Rs4,350 crore on rights basis through an offering of convertible preference shares, it said.

Tata Steel, nmeanwhile, is looking forward to begin work on its 6-million tonne per annum (mtpa) steel project in Orissa''s Kalinganagar Industrial Complex within three months.