Tata Steel UK to prepay debt of over 200 mn pounds
As part of restructuring, Tata Steel UK informed its lenders that it would prepay debt of over 200 million pounds to continue its objective of making its European operations debt-free.business Updated: May 12, 2009 15:52 IST
As part of restructuring, Tata Steel UK on Tuesday informed its lenders that it would prepay debt of over 200 million pounds to continue its objective of making its European operations debt-free.
"The company will prepay, voluntarily, over 200 million pounds of the non-recourse debt to continue its objective of de-leveraging its European operations," Tata Steel UK said in a statement in Mumbai.
Non-recourse debt is a secured loan that is availed of by pledging collateral but there is no personal liability on the part of the borrower.
This would be funded through additional support from Tata Steel, which has a significant liquidity buffer, it said.
Tata Steel UK has appointed Citigroup, Royal Bank of Scotland and Standard Chartered Bank as the co-ordinating banks to facilitate the process.
The banks with significant interest in the debt have expressed strong support towards the covenant reset proposal, it said.
Tata Steel UK held meetings with banks in London and Mumbai to discuss the current environment and the potential future impact on some covenant requirements under the company's debt package.
During discussions with lenders on the covenant package, the company said it has not sought any additional funding as it has sufficient liquidity for its operations.