NEW DELHI: Tata Steel seems to have started flexing muscles to usher in the next level of expansion in the company, but without making significant capital expenditure as it plans to bring down debt levels. Even as it is working on turning around its struggling European operations with positive cash flow, the company said it will raise $600 million, partly to refinance loans and partly to fund the capex for expansion at its Kalinganagar plant.
“Our focus is on increasing capacity in India; we know the European assets haven’t produced returns, but the efforts are on,” said Tata Steel chairman N Chandrasekaran at the Annual General Meeting on Friday. Chandrasekaran said the company aims to raise capacity of its Kalinganagar unit to 8 million tonnes per annum (mtpa) from 3 mtpa by 2022; however the deadline is subjective to market conditions and the firm’s cash flow position.
Koushik Chatterjee, chief financial officer, Tata Steel, also said the company is focused on increasing free cash flow to reduce its debt burden and has set a target of reducing gross debt by $1 billion in FY20, after Tata Steel’s merger of its European operations with Thyssenkrupp AG fell apart following failure to meet Europe’s antitrust requirements. He said the firm is focusing on “turning around” the European units based in the UK and the Netherlands. Currently, Tata Steel has net debt of `1.08 lakh crore as of March 2019.