By Prasenjit Bhattacharya
NEW DELHI--Tata Steel Ltd. (500470.BY) has arranged about 350
billion rupees ($6.6 billion) from a consortium of Indian banks to
fund the construction of a factory in eastern India, a person
familiar with the matter said Monday.
State Bank of India (500112.BY) and ICICI Bank Ltd. (532174.BY)
are part of the consortium, said the person.
He didn't name the other lenders.
The fundraising indicates banks maybe willing to consider large
infrastructure projects again for financing.
Funding for infrastructure projects in India has dropped sharply
over the past year. Banks, which already have a large exposure to
the sector, have become reluctant to fund companies such as power
producers and steelmakers further because of worries over a slowing
local economy.
As of June 30, Tata Steel, the eighth-largest steelmaker
globally by capacity, had $9.3 billion in net debt. Most the debt
had been taken six years ago when it acquired Anglo-Dutch
steelmaker Corus, now named Tata Steel Europe.
While Tata Steel Europe's financial performance has been weak
over the past few quarters due to the economic troubles in Europe,
Tata Steel's Indian operations have been growing at a fast
clip.
Tata Steel currently operates a plant in the eastern Indian town
of Jamshedpur with a capacity of 10 million metric tons a year.
The company has arranged the funding for its second plant, which
it is building in the town of Kalinganagar. It plans to produce 6.0
million tons of steel a year at the new factory.
Write to Prasenjit Bhattacharya at
prasenjit.bhattacharya@dowjones.com
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