Aimed at replacing costlier debt, Tata Steel Group today completed restructuring of its entire international loan portfolio arising out of Corus buy in 2007 with the execution of refinancing deals worth USD 5.4 billion.
"Along with the recent bond issuance of USD 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," said Group Executive Director (Finance and corporate) Koushik Chatterjee.
"The overall capital structure and the consolidated leverage level will remain unaffected by this financing while the cost of the same will be lower," he added.
The steel major said Tata Steel UK Holdings "executed agreements for the refinancing of its bank debt through term loan and revolving credit facilities of Euro 3.05 billion (USD 3.89 billion)".
"Further, Tata Steel Global Holdings, another 100 per cent indirect subsidiarity of Tata Steel Ltd incorporated in Singapore has also executed agreements today for loan facilities of USD 1.5 billion...," it added.
The proceeds of this loan would be used to repay term debts, term out working capital and fund investment needs of the Tata Steel Group outside India, Tata Steel said.
Tata Steel had acquired Corus, now known as Tata Steel Europe, for USD 12.9 billion in 2007. However, shortly after the acquisition, an economic slowdown hit company's sales. It is now looking to sell part of its assets in Europe.
Tata Steel said the 5-year loan and revolving credit facilities for Tata Steel UK Holdings and for Tata Steel Global Holdings have been contracted as part of a joint USD 3.1 billion mandate to 18 mandated lead arrangers including ANZ, Bank of America Merrill Lynch and BNP Paribas among others.
"Simultaneously, the seven-year loan of Euro 1.8 billion for Tata Steel UK Holdings has been contracted with a set of seven mandated lead arrangers - State Bank of India, ICICI Bank, Bank of Baroda, Bank of India, Exim Bank of India, Syndicate Bank and SBI (Mauritius)," it added.
Chatterjee said the new loan facilities were 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," he added.
