Tata Steel UK Holdings Limited (TSUKH) a 100% indirect subsidiary of Tata Steel Limited has executed agreements for the refinancing of its bank debt through term loan and revolving credit facilities of €3.05 billion.
The debt was originally incurred in relation with the acquisition of Corus Group plc in 2007. The new financing structure consists of a 5-year loan of €370 million, a 6 year revolving credit facility for working capital purposes of £700 million and a 7-year loan of €1.8 billion, with more favourable terms and pricing relative to the earlier debt.
Further, Tata Steel Global Holdings Pte Ltd. (TSGH), another 100% indirect subsidiary of Tata Steel Limited incorporated in Singapore has also executed agreements for loan facilities of US$1.5 billion comprising of a 5 year loan of US$700 million and a 7 year loan of US$800 million.
The proceeds of this loan will be used to repay term debts, term out working capital and fund investment needs of the Tata Steel Group outside India.
The 5 year loan and revolving credit facilities for TSUKH as well as the loan facilities for TSGH have been contracted as part of a joint US$3.1 Bn mandate to 18 Mandated Lead Arrangers: ANZ, Bank of America Merrill Lynch, MUFG, BNP Paribas, Citi, Credit Agricole, Deutsche Bank, HSBC, Rabobank, RBS, Standard Chartered, Axis Bank, Emirates NBD, Mizuho, First Gulf Bank, Societe Generale, ING and SMBC. Simultaneously, the 7 year loan of €1.8 billion for TSUKH has been contracted with a set of 7 Mandated Lead Arrangers: State Bank of India, ICICI Bank, Bank of Baroda, Bank of India, Exim Bank of India, Syndicate Bank and SBI (Mauritius).
Koushik Chatterjee, Tata Steel Limited Group Executive Director (Finance and Corporate), said: "The new loan facilities are 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.
"Along with the recent bond issuance of US$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. This financing also demonstrated the company's long standing relationship with the banking syndicate and I would like to thank these institutions for their continuing support to the Tata Steel Group."
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