Riversdale cash to fuel Tata Steel expansion

Mumbai : Selling its stake in Riversdale Mining for over a billion dollars could not have come at a more appropriate time for Tata Steel. With ambitious capex plans for its brownfield expansion and greenfield projects in Jamshedpur and Orissa, respectively, and a high leverage on its consolidated books, the cash will improve the manoeuvrability of Tata Steel. And, at a time when cost of capital is going up in India in an inflationary environment, staying in cash is a preferred option for most in India Inc. “The board will decide on the deployment of the capital. The proceeds will go to the combined pool of cash, and this will enhance our flexibility of choices.

We can use it for our capex or to restructure the capital structure. As on March-end, we had $1.9 billion of liquidity, $10.4 billion of net debt. We do not have any immediate repayment obligation. But now, the overall liquidity will go up by another billion. So, our options will get enhanced substantially," said Tata Steel’s chief financial officer, Koushik Chatterjee.