Tata Steel Initiates Debt-To-Equity Conversion of $565 Million In T Steel Holdings

Tata Steel Ltd is Asia’s first integrated private steel company set up in 1907. The company has a presence across the entire value chain of steel manufacturing from mining and processing iron ore and coal to producing and distributing finished products. The company has a target to increase domestic steelmaking capacity to 30 MnTPA by 2025.

Tata Steel To Convert $565 Million Debt Into Equity in Subsidiary

Tata Steel Ltd. has converted debt instruments totaling $564 million, approximately Rs 4,713 crore, into equity in its subsidiary, T Steel Holdings Pte. This conversion involved transforming the debt into over 359 crore fully paid-up equity shares, each with a face value of $0.157. As a result of this significant transaction, T Steel Holdings Pte. will remain a wholly owned subsidiary of Tata Steel Ltd. This move, disclosed in an exchange filing, demonstrates Tata Steel’s strategic effort to strengthen its financial position by converting debt into equity, thereby enhancing the capital structure of its subsidiary.

Tata Steel’s Recent Q4 Performance

Tata Steel Ltd. reported a net profit of Rs. 554.6 crore for the January-March quarter, marking a significant decline of approximately 65% compared to the Rs. 1,566 crore recorded in Q4FY23. The company’s revenue for Q4FY24 totaled Rs. 58,687.3 crore, slightly surpassing expectations. This revenue figure reflects a decrease of nearly 7% from the Rs. 62,961 crore reported in the same quarter the previous year. Tata Steel continues to strategize for sustainable growth and operational resilience.

Conclusion: Tata Steel’s conversion of debt into equity, amounting to Rs. 4,713 crore in its subsidiary T Steel Holdings Pte., underscores its strategic approach to enhance financial flexibility and strengthen its subsidiary’s capital structure. This move aligns with Tata Steel’s efforts to optimize its balance sheet and bolster long-term financial sustainability amidst evolving market conditions.

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