MUMBAI (Commodity Online): In an attempt to reduce its debt, Tata Steel has initiated talks with international investors to pump in Rs 5,000 crore through equity and an equivalent amount through debt.

The money raised will be used to lower the steel giant’s mountainous $12.8 billion (Rs 59,584 crore) debt.

The deal was on and expected to be consummated soon. The company will raise Rs 5,000 crore debt after the equity dilution exercise. Promoters currently hold 31.18% stake in Tata Steel and the public 41.90%.

Sources said the money will be raised in foreign currency and Tata Capital would be helping with the transactions.

A resolution to raise the money was passed at the company’s board meeting on November 26, the day Tata Steel announced its consolidated second-quarter results.

After the dilution, the company has planned to raise another Rs 5,000 crore through debt.

Tata Steel has raised $1.6 billion till September 30. The company has prepaid $500 million of loans in the current fiscal. Koushik Chatterjee, Tata Steel chief financial officer, during the announcement of the consolidated second-quarter results on November 26, had said the plan is to raise money this fiscal so as to lower debt by $2 billion.

Chatterjee had said the company has no repayment obligations for the next 12 months.

As on September 30, Tata Steel had a cash of $2.2 billion on its books. The steelmaker is also looking to pare debt by disposing of some non-core assets. No details have been made public on this yet.

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