Hindustan Times (Jalandhar)

Tatas in talks to raise $1.5 bil­lion via ECB

- Deborshi Chaki deborshi.c@livemint.com

MUM­BAI: Tata Sons Ltd, the hold­ing com­pany of the Tata Group, is look­ing to raise up to $1.5 bil­lion in ex­ter­nal com­mer­cial bor­row­ing (ECB) in the next few weeks, two peo­ple di­rectly aware of its fundrais­ing plans said.

Tata Sons plans to use the funds partly to sub­scribe to the forth­com­ing rights is­sue of Tata Steel and also re­pay a part of the out­stand­ing debt of Tata Te­le­ser­vices (TTSL), which is in the process of merg­ing with Bharti Air­tel Ltd , the peo­ple cited above said on condition of anonymity.

“Tata Sons has re­ceived ap­proval from the Re­serve Bank of In­dia for the pro­posed ECB and has be­gun dis­cus­sions with for­eign lenders to raise the funds,” said the first per­son cited above.

ECBs are loans given by non­res­i­dent lenders to In­dian bor­row­ers in for­eign cur­rency. Un­der the cur­rent reg­u­la­tory frame­work, ECBs can be raised ei­ther through the au­to­matic route, which is lim­ited to cer­tain sec­tors or un­der the ap­proval route, for which the RBI’s per­mis­sion is nec­es­sary.

In De­cem­ber, Tata Steel board ap­proved a rights is­sue of ₹12,800 crore, pri­mar­ily to fund the ex­pan­sion of its Kalin­gana­gar fa­cil­ity by 5 mil­lion tonnes per an­num (MTPA) to 8 MTPA. The com­pany has said the ex­pan­sion will be com­pleted in four years and funded through a mix of debt and eq­uity.

“Post the rights is­sue, Tata Sons wants to re­tain its stake in Tata Steel at the cur­rent level for which it will have to in­fuse ad­di­tional eq­uity,” said the sec­ond per­son cited above.

An email sent to Tata Sons re­quest­ing com­ment did not elicit a re­sponse till press time on Tues­day.

“Apart from sub­scrib­ing to the rights is­sue, the funds raised through ECB will be also used to re­pay a part of the ₹22,000 crore debt of Tata Te­le­ser­vices,” the sec­ond per­son said.

 ?? MINT/FILE ?? Tata Sons chair­man N Chan­drasekaran
MINT/FILE Tata Sons chair­man N Chan­drasekaran

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