Tata Steel in talks with banks for 3.5 bn pounds loan

Leading steel producer Tata Steel is in discussions with banks to raise loans worth 3.5 billion pounds (over Rs 25,000 crore) for its UK unit.

Tata Steel is in talks with 11 banks for loans to the tune of 3.5 billion pounds for the company's UK unit, according to a Bloomberg report.

BNP Paribas SA, Credit Agricole CIB, HSBC Holdings Plc and Royal Bank of Scotland Group Plc are among the banks that may lend 2.5 billion pounds over a period of five years, it said.

According to the report, Citigroup Inc, Deutsche Bank AG, Standard Chartered Plc and ING Vysya Bank may also provide funds to Tata Steel.

Quoting people familiar with the development, Bloomberg said that State Bank of India may arrange a 1 billion pound loan over a period of seven years.

However, the Tata Steel officials declined to comment on the issue.

Going by the report, Tata Steel Chief Financial Officer Koushik Chatterjee on August 12 said the steel-maker plans to refinance as much as $6.5 billion of long-term debt.

The company had taken loans to fund its $12.9 billion acquisition of Corus Group Plc in 2007, just before the global economic slump pared demand for steel and forced banks to curtail lending.

Shares of Tata Steel closed marginally down at Rs 539.95 on the Bombay Stock Exchange today.