MUMBAI, July 14 (Reuters) – India’s Tata Steel (TISC.BO) on Wednesday denied a media report the company was planning to raise about $2 billion through fresh equity over the next quarter to help fund expansion. “Nothing at this point,” a spokesman told Reuters when asked about fund raising plans. Citing unnamed bankers, the Financial Chronicle newspaper on Wednesday reported the steelmaker was looking to raise funds either by selling shares to institutions or through an issue of global depositary receipts. [ID:nSGE66D03D]
The company had sounded out investment banks to finalise a lead arranger for the offering, it said.
Tata Steel is the world’s 7th largest steelmaker by output, according to the World Steel Association rankings released on Tuesday, up from the eighth spot.
In May, Tata Steel’s finance head, Koushik Chatterjee, had said the company was looking at options to raise equity and was seeking long-term funds for steel projects, mainly to raise capacity in India, where demand is growing in double digits.
Subsequently, its board approved issuing up to 15 million shares and 12 million convertible warrants to founder Tata Sons on a preferential basis, with the price to be decided later.
Tata Steel, which bought Europe’s second-largest steelmaker Corus in 2007, raised $500 million last July by listing global depositary receipts (TISCq.L) on the London Stock Exchange to expand in India and in the United Kingdom. [ID:nBOM19179]
The company’s gross debt stood at $12.9 billion at end of last December.
Shares in Tata Steel, valued at $9.7 billion by the market, were trading 0.9 percent higher by 0630 GMT, in a Mumbai market .BSESN up 0.5 percent. The stock had risen as much as 2.2 percent in opening trades. (Reporting by Surojit Gupta and Prashant Mehra; Editing by Ranjit Gangadharan)