Tata Steel to invest $2.11 bn in Singapore unit to repay overseas debt, fund UK transition
NEW DELHI:Tata Steel Ltd will invest ₹17,408 crore ($2.11 billion) in its Singapore unit, T Steel Holdings Pte Ltd, to fund the restructuring of its struggling UK business as well as repay the debt of its offshore entities.Tata Steel will also be writing off $565 million of existing debt to T Steel, converting it into equity shares, Asia’s oldest steelmaker said in regulatory disclosures on Wednesday. The investment in T Steel, a holding company for the shares of Tata Steel’s overseas subsidiaries, will be done over the course of 2024-25.Tata Steel reported a 65% year-on-year decline in its consolidated profit, to ₹554 crore, for the quarter ended 31 March, missing Street estimates.
Analysts polled by Bloomberg had a consensus estimate of ₹890 crore profit.The financials were dragged down in part by the company’s two European units, which reported a combined EBITDA loss of just under ₹650 crore. EBITDA stands for earnings before interest, tax, depreciation and amortization.Tata Steel’s Dutch unit was in the red on account of a relining of one of its blast furnaces, which curtailed production for the better part of the January-March period.
The UK operations have been consistently in the red on account of high structural costs in the country, including higher energy prices.Also read | Europe business to continue to dent Tata Steel’s earningsTata Steels’ consolidated revenue for the fourth quarter at ₹58,687 crore was 7% lower compared to the corresponding period last year. Analysts had estimated a topline of ₹58,375 crore.Again, the laggards were the two European units, where sales volumes dropped year-on-year, even as sales volume improved in India.
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