Tata Steel prioritises over $2 bn gross debt reduction in FY22
Steel

Tata Steel prioritises over $2 bn gross debt reduction in FY22

The estimated average expenditure of Tata Steel in India, over the next five years is around Rs 10,000-12,000 crore per annum, and that leaves out potential acquisitions. Tata Steel is poised for the upcoming growth stage even as it proceeds to stay the course on deleveraging.

The firm is likely to decrease gross debt by over $2 billion in FY22.

Koushik Chatterjee, Executive Director and Chief Financial Officer, Tata Steel, told the media that to position the next stage of the growth, the company would continue to deleverage and make its balance sheet even more effective.

The presentation of the investors informed that amongst the FY22 deleveraging priorities, over $2 billion gross debt reduction and prioritising offshore debt pre-payments. He said the firm had made material repayments in the Singapore and European balance sheets even in the June quarter.

Chatterjee further added that in FY21, Tata Steel decreased net debt by $4 billion. In the next 2-3 years, the priority would be nearly $1 billion of repayment every year before the allocation surpluses towards growth. If there are acquisition possibilities, they will revisit the level.

He also pointed out that despite the Bhushan Steel and Usha Martin acquisitions of over Rs 40,000 crore in the interim period, the company's net debt has been restored to FY18 level of Rs 75,000 crore.

The firm was able to record gross debt/EBITDA of 2.9x and net debt/EBITDA around 2.5x. However, it has established an aim of net debt/EBITDA at 2x.

Image Source


Also read: Crude steel output of Tata Steel surges over 43%, sales by 35%

The estimated average expenditure of Tata Steel in India, over the next five years is around Rs 10,000-12,000 crore per annum, and that leaves out potential acquisitions. Tata Steel is poised for the upcoming growth stage even as it proceeds to stay the course on deleveraging. The firm is likely to decrease gross debt by over $2 billion in FY22. Koushik Chatterjee, Executive Director and Chief Financial Officer, Tata Steel, told the media that to position the next stage of the growth, the company would continue to deleverage and make its balance sheet even more effective. The presentation of the investors informed that amongst the FY22 deleveraging priorities, over $2 billion gross debt reduction and prioritising offshore debt pre-payments. He said the firm had made material repayments in the Singapore and European balance sheets even in the June quarter. Chatterjee further added that in FY21, Tata Steel decreased net debt by $4 billion. In the next 2-3 years, the priority would be nearly $1 billion of repayment every year before the allocation surpluses towards growth. If there are acquisition possibilities, they will revisit the level. He also pointed out that despite the Bhushan Steel and Usha Martin acquisitions of over Rs 40,000 crore in the interim period, the company's net debt has been restored to FY18 level of Rs 75,000 crore. The firm was able to record gross debt/EBITDA of 2.9x and net debt/EBITDA around 2.5x. However, it has established an aim of net debt/EBITDA at 2x. Image Source Also read: Crude steel output of Tata Steel surges over 43%, sales by 35%

Next Story
Infrastructure Energy

REC Transfers HVDC Project to Power Grid

REC Limited has successfully handed over the Special Purpose Vehicle (SPV) for a High-Voltage Direct Current (HVDC) transmission project to Power Grid Corporation of India Limited (PGCIL). This strategic move aligns with the nation's objectives to strengthen its power transmission network. Key Highlights: Project Overview: The HVDC project, under the inter-state transmission system (ISTS) initiative, is a critical component of India's push toward robust and efficient electricity transmission. It aims to handle bulk power transfer across long distances while ensuring minimal losses. Role of RE..

Next Story
Infrastructure Transport

NF Railway Collaborates with IIT Guwahati

The Northeast Frontier (NF) Railway has signed strategic Memorandums of Understanding (MoUs) with IIT Guwahati to foster technological advancements and improve railway operations in the region. This partnership focuses on innovative solutions to enhance safety, efficiency, and sustainability in rail infrastructure. Key Highlights: Purpose of MoUs: The collaboration aims to leverage IIT Guwahati's expertise in technology and research for implementing cutting-edge solutions across railway operations. Key areas of focus include: Automation and digitization in maintenance. Sustainability initiati..

Next Story
Infrastructure Transport

Danapur Division Modernization Plans Revealed

The Railway Board has unveiled ambitious plans for the expansion and modernization of the Danapur Division, a critical hub under the East Central Railway. The initiative focuses on infrastructure development, enhanced passenger amenities, and operational efficiency. Key Highlights: Scope of Modernization: The Railway Board's blueprint emphasizes: Upgrading existing infrastructure to accommodate more passenger and freight traffic. Improving station facilities, such as platforms, waiting areas, and connectivity. Introducing advanced signal systems for safer and smoother operations. Freig..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000