News: Tata completes refinancing of debt
Tata Steel has executed agreements for the refinancing of its bank debt through term loan and revolving credit facilities of €3.05 billion as it tackles the existing debt of Tata Steel Europe, the operations it bought in 2007 when it was know as Corus.
Indian-owned steelmaker, that operates sites in Rotherham and Sheffield, now has a new financing structure consists of a five year loan of €370m, a six year revolving credit facility for working capital purposes of £700m and a seven year loan of €1.8 billion, with more favourable terms and pricing relative to the earlier debt.
Tata Steel UK Holdings Limited, a 100% indirect subsidiary of Tata Steel Limited, has contracted 18 global financial institutions for the facility including Bank of America Merrill Lynch, Standard Chartered, Deutsche Bank, HSBC, Rabobank and RBS.
Tata Steel Global Holdings Pte Ltd., another 100% indirect subsidiary of Tata Steel Limited, incorporated in Singapore, has also executed agreements for loan facilities of $1.5 billion comprising of a five year loan of $700 million and a seven year loan of $800 million. The group said that the proceeds of this loan will be used to repay term debts, term out working capital and fund investment needs of the Tata Steel Group outside India.
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The company funded its acquisition of Corus in significant part by debt, raised both in India and overseas, and as a result Tata had sizeable repayment and debt servicing obligations on an ongoing basis.
In 2013, Tata Steel announced a $1.6 billion writedown on its assets, mainly on the European operations that have suffered from a market slowdown and rising raw material prices since Corus joined the Tata Steel family in a $10 billion transaction. A write down reduces the book value of an asset if it is overstated compared to current market values.
In July, $1.5 billion was raised by the Mumbai group as it began to tackle its debt of $7 billion with new bonds listed on the Frankfurt Stock Exchange.
Koushik Chatterjee, group executive director (finance and corporate) at Tata Steel Limited, said: "The new loan facilities are being put in place well ahead of any material maturities of the existing debt structure of the Tata Steel Group.
"The financing structure has been designed with flexible terms and better pricing that will provide financial headroom to the international business especially in Tata Steel Europe in the coming years.
"Along with the recent bond issuance of $1.5 billion completed in July this year, this marks the completion of the restructuring and refinancing of the entire international debt portfolio and de-risking of the capital structure of the Tata Steel Group."
In September, Tata Steel announced it will be creating a new R&D centre at the University of Warwick, a move that is likely to signal the end for its Research & Development (R&D) site in Rotherham.
Earlier this month, Tata Steel Europe announced that the Klesch Group had begun detailed due diligence and negotiations for the potential purchase of its Long Products Europe business, which includes the facility at Scunthorpe.
Tata Steel website
Images: Tata Steel
Indian-owned steelmaker, that operates sites in Rotherham and Sheffield, now has a new financing structure consists of a five year loan of €370m, a six year revolving credit facility for working capital purposes of £700m and a seven year loan of €1.8 billion, with more favourable terms and pricing relative to the earlier debt.
Tata Steel UK Holdings Limited, a 100% indirect subsidiary of Tata Steel Limited, has contracted 18 global financial institutions for the facility including Bank of America Merrill Lynch, Standard Chartered, Deutsche Bank, HSBC, Rabobank and RBS.
Tata Steel Global Holdings Pte Ltd., another 100% indirect subsidiary of Tata Steel Limited, incorporated in Singapore, has also executed agreements for loan facilities of $1.5 billion comprising of a five year loan of $700 million and a seven year loan of $800 million. The group said that the proceeds of this loan will be used to repay term debts, term out working capital and fund investment needs of the Tata Steel Group outside India.
Advertisement
The company funded its acquisition of Corus in significant part by debt, raised both in India and overseas, and as a result Tata had sizeable repayment and debt servicing obligations on an ongoing basis.
In 2013, Tata Steel announced a $1.6 billion writedown on its assets, mainly on the European operations that have suffered from a market slowdown and rising raw material prices since Corus joined the Tata Steel family in a $10 billion transaction. A write down reduces the book value of an asset if it is overstated compared to current market values.
In July, $1.5 billion was raised by the Mumbai group as it began to tackle its debt of $7 billion with new bonds listed on the Frankfurt Stock Exchange.
Koushik Chatterjee, group executive director (finance and corporate) at Tata Steel Limited, said: "The new loan facilities are being put in place well ahead of any material maturities of the existing debt structure of the Tata Steel Group.
"The financing structure has been designed with flexible terms and better pricing that will provide financial headroom to the international business especially in Tata Steel Europe in the coming years.
"Along with the recent bond issuance of $1.5 billion completed in July this year, this marks the completion of the restructuring and refinancing of the entire international debt portfolio and de-risking of the capital structure of the Tata Steel Group."
In September, Tata Steel announced it will be creating a new R&D centre at the University of Warwick, a move that is likely to signal the end for its Research & Development (R&D) site in Rotherham.
Earlier this month, Tata Steel Europe announced that the Klesch Group had begun detailed due diligence and negotiations for the potential purchase of its Long Products Europe business, which includes the facility at Scunthorpe.
Tata Steel website
Images: Tata Steel
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