Tata Steel will raise $ 600 million, partly to refinance loans and partly to finance the capital expenditures for the second phase expansion at its Kalinganagar plant, Kushik Chatterjee, chief financial officer of Tata Steel, told reporters. The company is focused on increasing free cash flow to reduce its debt burden, he added, addressing the media after the AGM.
Chatterjee noted that his company has set a goal to cut gross debt by $ 20 billion in fiscal 2019-20 following the failure of Tata Steel's merger with its European operations with Thyssenkrupp AG due to non-compliance with European antitrust requirements. Chatterjee said the company will strive to make its European operations self-sufficient.
While Tata Steel's EBITDA (earnings before interest, taxes, depreciation and amortization) is improving, virtually all of the profits from the business in India will be used to service debt for European operations. The company reported its first positive free cash flow in a decade in the past fiscal year.
N. Chandrasekaran, chairman of the board of directors of Tata Steel, said the company is focused on reducing debt. “Our focus is on increasing capacity in India. We know that European assets were not profitable, but efforts continue, ”he stressed.
