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Tata Steel today said that its UK subsidiary signed agreements for the refinancing of its bank debt through term loan and revolving credit facilities of Euro 3.05 billion ($3.89 billion). The debt was originally incurred for Corus Group acquisition in 2007.
The new financing structure consists of a five-year loan of Euro 370 million, a six-year revolving credit facility for working capital purposes of 700 million pound and a seven-year loan of Euro 1.8 billion, with more favourable terms and pricing relative to the earlier debt.
Koushik Chatterjee, Tata Steel Limited Group Executive Director (Finance and Corporate), said: “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. The overall capital structure and the consolidated leverage level will remain unaffected by this financing while the cost of the same will be lower.
