Bhushan acquisition likely to raise Tata Steel’s leverage

canada goose outlet nyc Rating agency Fitch on Wednesday said Tata Steel’s acquisition of controlling stake in Bhushan Steel is likely to raise its leverage over the next two to three canada goose shop uk years. canada goose outlet nyc

canada goose outlet black friday Tata Steel Ltd (TSL), which won the bid for Bhushan Steel Ltd (BSL) under the insolvency process, completed the acquisition of controlling stake canada goose parka outlet of 72.65 percent in the debt laden firm last week. canada goose outlet black friday

official canada goose outlet “Tata Steel Ltd’s acquisition of a canada goose factory outlet vancouver controlling stake in Bhushan Steel canada goose jacket outlet uk is likely to raise TSL’s leverage jacketstock over the next two to three canada goose outlet germany years.” Fitch Ratings said in a statement. official canada goose outlet

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canada canada goose jacket outlet sale goose outlet uk BSL, which has steelmaking capacity of around 5 million tonnes per canada goose uk site annum (MTPA), was one of five key distressed steel assets put up for bidding under insolvency proceedings in India. canada goose outlet uk

canada goose outlet sale “Under the resolution plan, Bhushan’s financial creditors will receive Rs 352 billion for settlement of existing financial debt. This amount will be financed with new secured debt of Rs 165 billion and canada goose outlet new york city cash on TSL’s balance sheet. TSL will subsequently acquire a 72.65 percent equity canada goose outlet in usa stake in Bhushan (Steel),” Fitch said. canada goose outlet sale

canada goose canada goose outlet store toronto outlet new york city TSL’s projected steelmaking capacity canada goose outlet location will increase to 23mtpa with the Bhushan acquisition and including TSL’s own canada goose kensington parka uk 5mtpa capacity expansion scheduled to be completed in 2022, it canada goose outlet winnipeg said. canada goose outlet canada goose outlet online reviews new york city

canada goose outlet online uk This is in line with management’s intention of doubling capacity in India from 13 MTPA in the next five years. Bhushan’s main plant is relatively close, about 150 km away from TSL’s Kalinganagar plant in Odisha in eastern India. Bhushan’s plant is underutilised, producing around 3.5mtpa currently. canada goose outlet online uk

canada goose outlet shop TSL believes its turnaround canada goose outlet houston plan will enable the plant to reach close to 100 percent utilisation in two years, it added. canada goose canada goose discount uk outlet shop

canada goose outlet reviews Bhushan’s plant, unlike TSL’s, canada goose outlet kokemuksia does not benefit from use of captive raw materials currently. However, TSL envisages gains from improvement in operating metrics and from unified marketing and procurement. canada canada goose jacket outlet store goose outlet reviews

canada goose outlet store uk Bhushan’s product mix is enhanced by downstream facilities like its cold rolling mill and galvanizing units. TSL also has the option to increase capacity at Bhushan’s site in the future, which is useful given the significant time required to set up a green field plant in India. canada goose outlet store uk

canada goose outlet The BSL acquisition will enable TSL to improve its canada goose outlet eu domestic market share, but Fitch estimates it will raise TSL’s leverage, in terms of net debt to EBITDA, to 4x over the next two to three years from around 3x at end March 2018. canada goose outlet

canada goose outlet jackets It said TSL’s net debt will increase by around Rs 35,000 crore due to the acquisition, excluding additional working capital debt at Bhushan. canada goose outlet jackets

canada goose canada goose outlet store new york outlet uk sale “We assume additional EBITDA of around INR45 billion in the second year following the acquisition, based on an output of 5 million tonnes and an EBITDA per tonne canada goose stockists uk of around Rs 9,000, based on TSL successfully improving operations at Bhushan to near optimum levels canada goose outlet canada goose outlet woodbury within two years,” the Fitch statement said. canada goose outlet uk sale

goose outlet canada TSL has also shown interest in acquiring canada goose outlet store montreal a controlling stake in another steel asset Bhushan Power and Steel Ltd. The result of that bidding process is likely to canada goose outlet vancouver be known within the next canada goose outlet price few months. A successful bid is likely to further increase TSL’s leverage over the canada goose jacket outlet medium term, Fitch added goose outlet canada.