Tata Power looks to use preference share, divestment proceeds to cut debt

After its decision to merge the Mundra subsidiary with itself, Tata Power looks to use preference share and divestment proceeds of Rs 4,000 crore to reduce the unit’s debt.

In an investor presentation on Tuesday, Tata Power said the company aims to sustain net debt below Rs 25,000 crore beyond FY21. It also shared plans to simplify business by reducing the number of entities it currently holds. 

According to Tata Power, the company looks to reduce Coastal Gujarat Power (CGPL)’s debt using “preference and divestment proceeds of Rs 4,000 crore to generate interest cost savings of Rs 380 crore per annum.” CGPL