Tata Steel today said it will seek shareholders nod to raise up to Rs 10,000 crore through various debt securities including redeemable non-convertible debentures (NCDs).
The firm will approach its shareholders at its annual general meeting scheduled for next month, it said in a regulatory filing.
It plans to “create, offer, invite for subscription, issue and allot, from time to time, in one or more tranches and/ or series, whether secured or unsecured redeemable NCDs including but not limited to bonds and/or other debt securities, denominated in Indian rupees or any foreign currency aggregating to an amount not exceeding Rs 10,000 crore or its equivalent…”
The issue will be on a private placement basis, during the period of one year from the date of this Annual General Meeting (scheduled for August 12) or such other period as may be permitted under the Act….., it added.
Explaining the rationale behind the exercise, Tata Steel said over the last few years, the company has been investing in its steel making facilities in India and mining assets worldwide, while continuing to upgrade its facilities in Europe and South-East Asia.
“The company seeks to balance its growth ambitions with its goal of having a healthy balance sheet. Growth opportunities are carefully evaluated and benchmarked against its cost of capital.Moreover, all selected growth projects are phased keeping in mind the financial health of the company,” it added.
As a step towards improving its capital structure, the firm strives to maximise the use of internal accruals and to monetise its non-core assets regularly to fund capital expenditure, it said.
It also seeks to continuously optimise its borrowings by ensuring they are aligned in terms of quantum, risk, maturity and cost with its earnings profile.
“Financial markets are very dynamic in nature and it is hard to predict when and which market may provide us with windows of opportunity to raise capital that is cost-effective, has better terms and can help lengthen our maturity profile,” Tata Steel said.