Tata has started talking with money lenders to start a new unit soon. The unit is British unit and citigroup is expected to refinance for the money. The money required for the new British unit which is provided by the Citigroup is about $5.4 billion. The report about the new unit was appeared in six sorces with knowledge of the matter recently.
The negotiations of TaTa steel even include Royal Bank of Scotland,Standard Chartered and BNP Paribas.
An official announcement have been declined by the company over any loans taken by TaTa. The loans were taken by TaTa steel to fund the acquisition of its new unit Corus in Europe. Corus is the second largest steelmaker in Europe in 2007.
The global economy slump has reduced the demand for steel hence many banks are giving curtail lending.
A five year loan is going on between TATA steel with a bulk payment . The amount of debt is abut euro 2 billion and the interest rate of the loan will be more. The interest loan will be more than 300 basis points which is above Libor. Some bonds may come to sale as Tata steel is expecting to do so soon. The sale of any bonds were been denied by the finance head of TaTa steel Koushik.