Koushik Chatterjee, chief financial officer, Tata Steel, said the $500 million GDR issue got a good response across the globe.
What is the road ahead on further capital raising?
Chatterjee: We started with $400 million based on investor appetite. Based on the quality of investors we have attracted to this issue, we scaled it to $500 million, and that’s where we closed. We wanted to do this GDR not as a flavour of the season but as a genuine capital raising exercise, which would enable us to rebalance the capital structure and use the funds more meaningfully for our projects.
On an earnings basis, the GDR works out to a dilution of about 8-9%?
Chatterjee: Yes, a little lower than that. Deployment would be more in expansion projects, which is on-going in Jamshedpur. This will also be in relation to the global mining assets and those projects are very attractive projects with high internal rates of return. So, earnings, going forward, when these projects are completed, would significantly offset the dilution.
None of these would be used for debt repayments?
Chatterjee: We do not have any debt repayment over the next 12 months of any material nature; there is enough liquidity in the system. We are anyway at around $1 billion of liquidity at this point of time, so, we will monitor the situation and see where it’s best deployed.
What is the loan repayment schedule at Tata Steel right now?
Chatterjee: Over the next 12 months, and we would be less than $200 million and that is more out of short-term working debt. Thereafter, it would be more around $1 billion the year after, which is FY11.
