Friday, 18 Feb 2011
TATA Steel, after its INR 3,477 crore follow on public offer, has secured commitments from investors to raise another INR 3,000 crore through a private placement of non convertible debentures in two tranches.
A part of this secured commitment had been raised in January for the Jamshedpur project and will continue as and when the need arises.
Mr Koushik Chatterjee Group CFO of TATA Steel told Business Standard that “The interest rate for this INR 3,000 crore NCD will be a ballpark of 9 to 9.75% and it will mature after 20 years.”
He said that “The idea is to move from high cost debt to a low cost one and with a better tenure. The company is now focusing on loan products that would give it a flexibility to repay over a long period of time, preferably 20 years, like in the case of this recent NCD.”
On a further fund raising of USD 500 million through a perpetual bond issue, which ideally is a very long term bond with interest payments that go on forever. Mr Chatterjee said that “Nothing is on the table right now.”
However, sources said that the company is looking to raise this sum through a long term bond placement.
Mr Koushik Chatterjee said that the company may launch the issue in the next three to six months.
Sources said the company was looking to raise the money from international market and will bear an interest rate of around 9%.
Mr Chatterjee made it clear that the INR 3,000 crore NCD will be used entirely for the capital expenditure of Jamshedpur and Orissa. He added that “Immediate focus is Jamshedpur expansion and commissioning and post that, the funding of the Orissa plant.”
(Sourced from BS)
Tags:Tags:TATA Steel, NCD, investors, non convertible debentures,Jamshedpur project,Orissa steel plant, Tata Steel expansion
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