Tata Steel hikes issue, Q1 net up

Written by Corporate Bureau | Mumbai, Jul 30 | Updated: Jul 31 2007, 05:12am hrs
In an effort to cut the debt burden to fund its $13-billion acquisition of Corus, Tata Steel has decided to increase the contribution from Tata Steel/Tata Steel Asia Ltd from $6.7 billion to about $7.4 billion. This increase will be covered by increasing the rights issue of 2% convertible preference shares announced earlier to Rs 6,000 crore, from Rs 4,350 crore.

The rights issue of equity shares will remain as announced earlier, in the ratio of 1:5 at a price of Rs 300 per share.

Riding strong demand from the automotive and construction sectors and the appreciating rupee, which has helped cut overseas debt, Tata Steel, the worlds sixth largest steel manufacturer, posted a 28.18 % increase in net profit at Rs 1,222.11 crore for the quarter ended June 30, 2007, against Rs 53.41 crore in the same quarter of the previous year. Total income (net of excise) increased 9.21% to Rs 4,343.70 crore for the quarter, from Rs 3,977.38 crore a year ago.

Operating profit, excluding one-time income, increased 8% to Rs 1,554 crore. The companys shares dropped 0.7 % to close at Rs 647.3 on the BSE on Monday, after climbing as much as 3.6 % earlier.

The companys steel production for the quarter dropped to 1.06 mt from 1.11 mt a year ago. Sales volume dropped to 1.04 mt from 1.11 mt in the same period a year ago.

The companys interest payments escalated 166% to Rs 80 crore in the quarter. A stronger rupee resulted in a net gain of Rs 553 crore on foreign currency loans raised to fund Corus, the company said.