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Tatas to raise $1B via revolving credit facility to fund EU operations

Tatas to raise $1B via revolving credit facility to fund EU operations
Tatas to raise $1B via revolving credit facility to fund EU operations

Globally renowned conglomerate Tata Sons is reportedly in talks with some of the leading banks in a bid to raise a billion dollars. Reliable sources affirm that the company is attempting to recapitalize some of its major businesses across the European continent. It has been speculated that Tata Sons, the holding company, is likely to raise the amount via a revolving credit facility – also termed as ‘revolver lines’.

People familiar with the knowledge of the matter claim that the company is in deep discussions with at least half a dozen banks, including the likes of Mitsubishi UFJ Financial Group, ANZ, Standard Chartered, Citi, HSBC, and more.

Tata Sons essentially aims to raise 250-275 bps via Tata International UK — its UK based arm, and the five-year money at Libor, of course alongside a guarantee from Tata Sons, the holding company. While the company’s spokesperson refused to comment on the matter, a group of top officials claimed that the company has been advised to keep ready a war chest amounting to USD 5 billion, along with USD 1.5 billion that must be accessible for emergencies.

As per sources familiar with the knowledge of the matter, Tatas intend to tie up a revolving credit facility and generate a liquidity pool. However, currently, the world is short of the might dollar supply, and in this situation, the terms and conditions have to be crafted in a way that is beneficial for borrowers as well as lenders, states a lender from the Tata Group, after having requested anonymity.

The COVID-19 pandemic has proved to be rather unprofitable for most Tata entities. Tata Steel in Europe is apparently facing a lot of financial pressure, and is likely to cut close to 1,250 jobs in the region.

A final decision pertaining to the capital raising is expected this week.

Source Credits: https://economictimes.indiatimes.com/news/company/corporate-trends/tatas-gun-for-1-b-revolver-lines-to-fund-european-ops/articleshow/75260370.cms