Mumbai:
Tata Steel
will infuse $2.1 billion (Rs 17,408 crore) in its Singapore arm, to repay debt of its offshore entities and to “support the
restructuring costs
” of its loss-making
UK operations
. Further, it will convert debt instruments worth $565 million (Rs 4,661 crore) it holds in the
Singapore arm
into equity shares. The
fund infusion
as well as the conversion of debt into equity will be done in this fiscal, said Tata Steel.
The Indian company owns 100% of Singapore arm called T Steel Holdings, which in turn owns the overseas steel assets including the UK plant. T Steel Holdings posted a loss of Rs 4,367 crore in FY23. Tata Steel will also be raising Rs 3,000 crore in the form of non-convertible debentures (NCDs). The company has been raising money through NCDs now and then.
Tata Steel is investing £1.25 billion ($1.6 billion) to build a new electric arc furnace (EAF) at its Port Talbot plant in UK, while deciding to shut down two blast furnaces at facility by Sept. The move will lead to axing of 2,800 jobs at the plant.
“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
,” said Tata Steel’s management.
