Tata Steel Plans To Invest $2.11 Bln In Singapore Arm; Also Eyes $360 Mln Via NCDs

Tata Steel Ltd. said its board approved investing up to $2.11 billion in the company’s Singapore-based subsidiary and raising as much as 3,000 crore rupees ($360 million) via non-convertible debentures (NCDs).

The board on 29 May cleared the proposal to infuse up to $2.11 billion in the company’s wholly owned subsidiary T Steel Holdings Pte. Ltd. by subscribing its equity shares in one or more tranches in FY25, the Indian steelmaker said in a stock exchange announcement.

In addition, the board approved the proposal to convert debt instruments aggregating to $565 million held by the company in T Steel Holdings into shares, also during the current financial year.

The company will continue to hold these converted equity shares.

SINGAPORE ARM RELEVANCE

Tata Steel routes its investment into overseas businesses through T Steel Holdings. The primary business of its unit includes holding equity shares of indirect overseas subsidiaries of the company and other entities, excluding banks.

The Mumbai-based company said the proposed cash fund infusion will be used by T Steel Holdings to repay the existing external debt at offshore entities and to support the restructuring costs at Tata Steel UK Ltd., a wholly owned subsidiary of Tata Steel.

Tata Steel will continue to hold 100% stake in T Steel Holdings following these transactions.

The company will seek the approval from the Reserve Bank of India (RBI) before executing the proposed transactions as prior permission from the RBI is required for investment beyond $1 billion in FY25 as per the Foreign Exchange Management (Overseas Investment) Directions 2022.

DEBENTURE ISSUE

Tata Steel said the board approved the issuance of NCDs to raise up to 3,000 crore rupees in one or more tranches on a private placement basis after reviewing the financing plan of the company.

Further, the board authorized a committee of directors to determine and approve the quantum, timing and terms of the NCDs issue, it added.

Note: $1 = 83.3340 Indian rupees

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