Tata Steel gains on buzz it seeks 500 mln pounds govt bailout in UK

Tata Steel rose 2.37% to Rs 274 on reports that the company's UK arm is seeking an estimated 500-million pounds government financial package to survive through the coronavirus lockdown period.

According to reports, Tata Steel, which owns the UK's largest steelworks in Port Talbot in Wales, is also holding discussions with the Welsh government as well as the UK Treasury as it seeks the 50-million pounds cap set on loans being offered under the UK's Coronavirus Large Business Interruption Loan Scheme (CLBILS) to be lifted.

The steel major major employs 8,385 people in the UK, including about 4,000 people in Port Talbot and 2,800 in other parts of Wales.

Meanwhile, Tata Steel announced on 27 April 2020 that the committee of directors has approved allotment of 10,000 - 7.70% unsecured, rated, listed, redeemable, floating coupon, non-convertible debentures (NCDs) of face value Rs 10,00,000 each, for cash aggregating to Rs 1,000 crore, to identified investor on private placement basis, on the terms and conditions as mentioned in the information memorandum for the said Issue. The NCDs are proposed to be listed on the wholesale debt market segment of BSE.

On 24 April 2020, the company's board approved issue of additional debt securities up to Rs 5,000 crore in the form of NCDs on private placement basis in one or more tranches ('Issue'). The funds from the Issue will be primarily deployed towards repayment of debt and general corporate purposes.

On a consolidated basis, Tata Steel reported a net loss of Rs 1,130.65 crore in Q3 December 2019 as compared to a net profit of Rs 2,268.58 crore in Q3 December 2018. Net sales fell 8.7% to Rs 34,774.29 crore in Q3 December 2019 over Q3 December 2018.

Tata Steel Group is among the top global steel companies with an annual crude steel capacity of 33 million tonnes per annum (MnTPA). It is one of the world's most geographically-diversified steel producers, with operations and commercial presence across the world.

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