Tata Steel Limited (TSL) is planning to further deleverage its balance sheet during this fiscal and beyond through a combination of internal cash flow generation and continuing efforts to rationalise the portfolio to focus on core businesses and markets.
This was stated by CEO and MD T.V. Narendran and executive director and chief financial officer Koushik Chatterjee in TSL’s latest annual report. They said through rigorous efforts, gross debt had been reduced by ₹17,864 crore to end the year with a ₹1,00,816 crore debt.”
“We will continue to focus on deleveraging as a primary strategic initiative to rebuild the balance sheet strength,” they said.
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Maturity profile
Despite some stress in the domestic debt markets, we extended the company’s debt maturity profile by successfully raising ₹4,315 crore through non-convertible debentures with a maturity of 15 years. We also put in place a 12-year, long-term, take-out financing for ₹15,500 crore at Tata BSL Ltd,” they said.
On the demand scenario, Mr. Narendran and Mr. Chatterjee felt although the first half was stable, the second half has brought with it a distinct decline in the automotive sector and other sectors too.
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“One of the key issues has been the credit flow to the system and we hope that structural policy actions will be undertaken to ensure increased credit flow is restored and private investment is encouraged to revive the economy.”
On the global front, the feeling was that while demand is expected to witness a gradual recovery, it will be at a lower pace (2018 global steel demand grew by 2.1 %), owing to risk of uncertainty over the trade environment.