KOLKATA: The Tata Steel board on Tuesday approved the company's decision to issue debt securities worth Rs 5,000 crore, comprising unsecured non-convertible debentures of up to Rs 4,000 crore plus a green shoe option of Rs 1,000 crore, on a private placement basis.
The move comes at a time when Tata Steel is integrating its Rs 35,200 crore acquisition of stressed asset Bhushan SteelNSE 1.48 %, is acquiring Usha Martin’s steel business for Rs 4,500 crore, and expanding its three million ..
“The committee of directors constituted by the board has approved the issue of debt securities on a private placement basis within the limits approved,” the company said in a notice to the exchanges on Tuesday, adding that these securities will be in the form of “unsecured, redeemable, rated and non-convertible debentures (NCDs)”.
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Earlier the company’s shareholders had approved the issuance of NCDs worth up to Rs 12,000 crore at the Tata Steel annual general meeting in July last year. The securities will have a tenure of 15 years. While the date of allotment is slated to be March 1, 2019, with the final date of maturity being March 1, 2034, and these will be listed at the wholesale debt market segment of BSE. While it will have a fixed rate coupon and an annual interest payment, the redemption of the NCDs will be in four ..
“This is a smart restructuring of debt. It offers a longer maturity on a good portfolio of Rs 5,000 crore. It will give the company an elongated repayment period and it comes on special terms. The funds can be utilised in several ways. With the recent ratings upgrade, it could also be a way to get a lower interest rate,” Abhisar Jain, analyst at Centrum Broking, said.
The Tata Steel scrip closed at Rs 504.15 on the BSE on Tuesday, down 0.14 per cent over its previous close.
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