Tata Steel to borrow $300m from IFC to aid expansion

2005-05-23

In order to part fund its one million tonne expansion plan, Tata Steel would be taking a $300 million 11-year term loan from International Finance Corporation, or IFC, informed Mr B. Muthuraman, managing director of Tata Steel. IFC is an arm of World Bank which extends financial lendings to large enterprises from the private sector across the world. Mr Muthuraman did not disclose the terms and conditions of the loan but said, “We have managed to get the loan on extremely competitive terms which are lower than the existing industry rates.” Sharing the company’s plans for the current fiscal, Mr Muthuraman said, “Over the past year we have been focusing our supplies to the automobile sector. In FY04-05, we sold 6,15,000 tonnes to the sector and in FY05-06 we have set up a target of selling 9,00,000 tonnes to the automobile sector in India.” He added that the company is also increasing its sales of its branded products which have risen substantially in FY04-05 at Rs 3,362 crores as compared to Rs 2,363 crores in FY03-04. The company will have a capex of Rs 2,900 crores in the current fiscal. With regard to Tata Steel’s short term plans, Mr Muthuraman said that in next couple of years the company would focus on maximising the full potential of its Jamshedpur plant by expanding its capacity. The steel major would also focus on executing its Kalinganagar project in Orissa. With its expanding capacities and increasing input costs, Mr Muthuraman said that the company would aggressively work upon securing enough raw materials. He added that Tata Steel would continue its strategy of capacity acquisitions both in India and abroad.