Tata Steel Ltd.
0.50 (0.30%) Tata Steel likely to reduce interest cost burden by 8%
Date: 24-11-2011Tata Steel, India’s biggest steel producer’s interest cost burden is likely to diminish notably to 10.75% on the Rs 9,300 crore debt the company took for brown-field expansion of Jamshedpur plant from 7 million tonne to 10 million tonne.
The company will be able to save on interest cost of around Rs 225 crore per annum which is 8% of the total interest cost burden on the company last fiscal. Tata Steel has been negotiating with the lenders and is now close to firming up the new interest rates.
The banks started re-working on the interest rates as Tata Steel's 3 million tonne additional steel capacity at Jamshedpur is due for commissioning by March 2012, with the project completion getting closer; the risk from the project is reduced. Further 3% interest rate reduction is expected on Rs 5,700 crore debt on the books of Centennial Steel and 1.5% to be decreased on Rs 3,600 crore on the books of Tata Steel.