Tata Steel announces $2.1 billion plan to meet twin objectives – ET Infra

Tata Steel said on May 29 that it will invest $2.1 billion (Rs 17,408 crore) in its Singapore arm. The fund infusion has two objectives — a) repaying the debt of its offshore entities and b) funding the rejig of its loss-making UK business.

Additionally, Tata Steel announced that it will convert debt instruments valued at $565 million (Rs 4,661 crore) held in its Singapore subsidiary into equity shares. Both the capital infusion and the debt-to-equity conversion are planned to be completed within this fiscal year.

The Indian company fully owns its Singapore subsidiary, T Steel Holdings, which manages its international steel assets, including the plant in the UK. T Steel Holdings reported a loss of Rs 4,367 crore in FY23. Additionally, Tata Steel plans to raise Rs 3,000 crore through non-convertible debentures (NCDs), a method it has frequently utilized for fundraising.

Tata Steel is investing £1.25 billion ($1.6 billion) to construct a new electric arc furnace (EAF) at its Port Talbot plant in the UK. As part of this plan, the company will shut down two blast furnaces at the facility by September, resulting in the loss of 2,800 jobs.

As statement by the Tata Steel management read: “We will proceed with proposal to shut down heavy end assets this year, and set up EAF by 2027. This is a difficult period of change for our people… With respect to EAF, we will place equipment orders by Sept 2024 and have signed the agreement with UK National Grid securing high voltage connection, which will be available on schedule. We have as part of discussions with the unions, offered the best ever package of support for affected employees in Tata Steel UK. We have agreed to final terms of proposed grant package with UK govt to support the £1.25 billion investment.”

  • Published On May 30, 2024 at 12:39 PM IST

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