Tata Steel seeks to raise borrowing limit

Tata Steel had reported a higher-than-expected profit for the quarter ended 31 March, as it benefited from an increase in domestic prices and a rebound in European demand for the alloy. Photo: AFP

It also plans a private placement of Rs.14,000 cr worth debt securities in India or abroad 

P.R. Sanjai : Live Mint 17 June 2014

Mumbai: India’s biggest steel maker Tata Steel Ltd on Tuesday said it was planning to increase its borrowing limit from Rs.50,000 to Rs.70,000 crore. It is also planning a private placement of Rs.14,000 crore worth debt securities, convertible into equity or otherwise, in India or abroad. The Tata Group company will seek shareholder approval for both measures.

A Tata Steel filing to the BSE also said it would seek approvals for “creation of charges on the movable and immovable properties of the company in respect of borrowings”.

As on March 31 2014, Tata Steel had a consolidated net debt of Rs.57,119 crore, according to Bloomberg data.

Tata Steel had reported a higher-than-expected profit for the quarter ended 31 March, as it benefited from an increase in domestic prices and a rebound in European demand for the alloy. Tata Steel earned a profit of Rs.1,035.87 crore in the fiscal fourth quarter, compared with a loss of Rs.6,528.51 crore a year ago, on a consolidated basis. Revenue rose 22.5% to Rs.42,428.05 crore fromRs.34,650.47 crore in the same period.

An improvement in the manufacturing sector in Europe, which became Tata Steel’s biggest market after its 2007 purchase of the UK’s Corus Group Plc. for $12.9 billion, helped sales grow at their fastest pace in three quarters.