Tata Steel to kick off roadshow to raise $1 bn via bonds in Singapore

This is the third foreign borrowing by the company since it bought Corus Steel in 2007 and the largest so far.

Written by ENS Economic Bureau | New Delhi | Published: April 23, 2013 12:54 am

In a major fund raising exercise Tata Steel will begin its roadshow on Tuesday and meet the investors to begin the process for raising up to $1 billion through issuance of Singapore dollar bonds listed on the Singapore Stock Exchange through its wholly owned subsidiary-Abja Investment Co. This is the third foreign borrowing by the company since it bought Corus Steel in 2007 and the largest so far.

The company in an announcement to the Bombay Stock Exchange said,“Abja Investment Co. Pte Ltd.,Singapore,a wholly owned subsidiary of Tata Steel Limited is contemplating an issuance of Singapore dollar bonds listed on the Singapore Exchange.”

The issue could be about $1 billion as per merchant banking sources. “It may not be so big but will definitely be a benchmark issue,” said one of them. A company spokesperson declined to comment on the subject.

Sources have confirmed that the roadshow will begin in Singapore on Tuesday and the issue may hit as early as on Thursday depending on the market conditions. The company is launching Reg S notes transaction which means that they are free from registration requirements of US securities laws.

“The funds raised may be used for general corporate purposes and for refinancing,” said a source close to the development.

Indian companies have raised $7.5 billion already in this calendar year,often to retire high cost domestic debt. Besides another Tata Group company,Tata Communications,the ICICI Group too has already launched Singaporean dollar issues earlier this year to raise SGD250 million and SGD225 million respectively. Tata Communications however raised another SGD150 million on Monday by reissuing its January bonds.

As on September 2012 Tata Steel has total debt of Rs 53,431 crore and has stayed at those levels since it acquired Corus. The news of the fund raising saw the company’s share price rise by 2.3 per cent on Monday and it closed at Rs 306.75.

The company has not yet disclosed the date of its result announcement for the quarter and year ended March 2013. The company has appointed Standard Chartered,SBI Capital Markets,RBS and Nomura for the issue.

Hitting the street

The firm will begin its roadshow on Tuesday and meet the investors to begin the process for raising up to $1 billion through issuance of Singapore dollar bonds through its wholly owned subsidiary-Abja Investment Co

This is the third foreign borrowing by the company since it bought Corus Steel in 2007 and the largest so far

Indian companies have raised $7.5 billion already in this calendar year

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