Rising interest rates not to impact payout: Tata Steel

KOLKATA: The hardening interest rate in the last few months will have no impact on Tata Steel's interest payout for its total debt of Rs 43,618 crore, a top company official today said.

"The overseas borrowing is hedged and rupee debt is at fixed rate so there will be no impact on the interest outgo as a company," Tata Steel CFO Kaushik Chatterjee said here today, on the sidelines of FPO roadshow of the company.

The company will repay debt of around Rs 1,000 crore from the proceeds of the follow-on public offer.

Speaking about its ongoing projects, Chatterjee said the land allotment in Vietnam is also happening but it will take time and this project was not among the priority now.

He said ranking in terms of priority, Jamshedpur, Orissa and Chhattisgarh projects topped the charts.

"We have identified Chhattisgarh land," Chatterjee said. The group will spend USD 2-2.2 billion in capex for the next two to three years.

He added that around USD 600 million will go to European operations, USD 300-400 will go to raw material related projects and balance would be pumped in 3-million tonne Jamshedpur expansion and other downstream projects.

Jamshedpur was expected to begin operation in phases from October this year.

Commenting on Steel Minister Virbhadra Singh's charge that it was "unethical" of Tata Steel to appoint the same set of merchant bankers as SAIL for its FPO, Chatterjee said merchant bankers don't act exclusively for any company.

"There are hardly any exclusivity clauses in mandate documents for appointment of merchant bankers," Chatterjee said.

And these bankers have long standing relationship with the company, he said.

Meanwhile, the FPO that opened today will close on February 21.