Tata Steel raising $ 600 million for domestic ops capex, refinancing debt

Tata Steel executive director and CFO Koushik Chatterjee said the company has set a target of reducing gross debt by $1 billion in FY20

Tata Steel is raising $600 million, mainly to fund the capital expenditure of phase 2 expansion at its Kalinganagar plant and the balance for refinancing of loans, siad Koushik Chatterjee, executive director and CFO, Tata Steel.

He was speaking on the sidelines of 112th Annual General Meeting of Tata Steel held here today.

 

Chatterjee said that the company had set a target of reducing gross debt by $1 billion in FY20, after Tata Steel's merger of its European operations with Thyssenkrupp AG fell apart after failing to meet Europe's anti-trust requirements. Tata Steel had a net debt of Rs 1 trillion, as of March 2019. While Tata Steel's earnings before interest, tax, depreciation and amortization (EBITDA)  levels have been improving, the profits from the domestic business will be used to pay off 85-90% of debt servicing on its European operations. However, last fiscal, the company reported its first positive free cash flow in almost a decade.

 

N Chandrasekaran, Chairman, Tata Steel, said the company is "aiming to reduce debt and bring it to 2-2.5 times debt to EBITDA. Our focus is on increasing capacity in India; we know the European assets haven't produced returns, but the efforts are on."