Tata Steel, part of the salt-to-software conglomerate Tata Group, will take a final call on whether to exit or remain invested in the Benga coal project in Mozambique ? in which it holds 35% ? after engaging with the project?s new majority owner, Indian state-owned mining consortium International Coal Ventures (ICVL).
Tata Steel had to take an impairment charge to the tune of Rs1,577 crore on its profit and loss account for the quarter ended 30 June, for which it announced earnings on August 13, after its earlier partner Rio Tinto decided to sell its majority holding in the Benga coal project to ICVL. Rio Tinto had to do so at a hefty discount over its original acquisition price. The impairment charge brought down Tata Steel?s overall profit for the April-June period below Street expectations.
?There are some infrastructure-related issues with the project and we have to discuss with ICVL as to what their future plans are for the Benga project, after which we will take a final call,? Koushik Chatterjee, group executive director (finance and corporate) said after the company?s annual general meeting in Mumbai on Thursday.
Chatterjee also stated that Tata Steel was going to raise funds to the tune of $5.5 billion during the current fiscal to refinance existing debt, said on Thursday. This includes the $1.5 billion that the steelmaker raised through a bond issuance recently.
TV Narendran, managing director of Tata Steel India and South Asia, stated that the first phase of the company?s upcoming steel plant in Kalinganagar, Odisha will be ready by the fourth quarter of FY15. Tata Steel chairman Cyrus Mistry had said earlier during the shareholders? meet that the project, in its first phase of 3 million tonne capacity, would generate direct employment for 3000 people.
Narendran stated that some of the engineering work for the second phase of the Kalinganagar project had already begun and construction would begin in full swing after the first phase is commissioned.
