Tata Steel Ltd is planning to sell $600 million of global depositary receipts to fund its India and UK operations, according to sources. Citigroup and JPMorgan are believed to be arrangers for the issue.
Denying the news, Tata Steel?s CFO Koushik Chatterjee told Reuters, ?This is not true. If there is any such plan, we will notify it at the right moment.?
Tata Steel, which acquired Anglo-Dutch steel maker Corus in 2007, was expected to use the funds to meet expansion in India and also to inject cash into the UK unit, sources said.
Tata Steel shares on Thursday were up 6.37% to close at Rs 420.15 on the Bombay Stock Exchange. The company, which gets a quarter of its revenue from India, is raising capacity to 9.8 million tonne from 6.8 million tonne at present. The company expects India demand to grow 25% in the current financial year.
Tata Steel has said it would inject 425 million pounds ($695.6 million) into Tata Steel UK in a phased manner.
Tata Steel, which has $2.1 billion in cash & equivalents and $1.3 billion in undrawn bank facility, does not have any material repayment obligations or refinancing requirements in the next 12 months.
The company on Thursday announced that it reported a dip of 60% in its net profit to Rs 4,849.24 crore for the year ended March 31, 2009, compared to Rs 12,349.9 crore reported in the previous year.
Net sales stood at Rs 1.47 lakh crore, up 12% from Rs 1.31 lakh crore in FY08.