Tata Steel is looking to raise $1.75 billion (equivalent of about Rs 12,563 crore) in syndicated offshore loans through its European unit, reports The Economic Times.
Through this fundraising round, the steel-maker aims to pare down its borrowing costs by nearly 100 basis points (100 bps=1 percentage point).
The loan, which would come with a mark-up on the dollar-based London Interbank Offered Rate (LIBOR), is expected to have a five-year maturity period. The mark-up on it is around 200 to 250 bps, the report added.
Moneycontrol couldn’t independently verify the report.
A Letter of Comfort from Tata Steel, the parent company, has helped in a 50 to 70 bps reduction in spreads, the article quotes dealers as saying.
Earlier, Tata Steel Europe had been in talks with Germany-based thyssenKrupp Steel Europe. The two companies had signed a deal in June last year, to create a 50:50 joint venture which would result in cost savings of 500 million euro (equivalent to Rs 3,957 crore). However, the merger deal didn't go through and the plan was scrapped in May.
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