Corporate Debt Restructuring Masterclass

18 July 2022 (Mon), 5pm Singapore/HK time

Indian steel major, Tata Steel reported net profits of INR 40bn ($549mn) for the quarter ended December vs. a loss of INR 12bn ($164mn) in the same period the year before. The company said that its quarterly EBITDA of INR 88bn ($1.2bn), up 46% QoQ and the highest on record, was driven by higher prices, better product mix, lower exports and operating efficiency initiatives. Tata Steel mentioned that key Indian subsidiaries also delivered robust financial performance with Tata Steel BSL and Tata Steel Long Products contributing to the strong earnings. The company said that it was focusing on performance and cash flow in the near-term after the termination of discussions with SSAB on Tata Steel Netherland (TSN) with the process to separate TSN and Tata Steel UK currently underway. CEO Mr. TV Narendran said, “The recovery in the global and Indian economy has led to sharp improvement in steel demand in India. We pivoted our deliveries to domestic markets, to cater to the requirements of our local customers by reducing exports. All the segments, especially automotive, have performed extremely well”. CFO Mr. Koushik Chatterjee added, “After reduction in net debt by INR 8,285 crores ($1.1bn) in the first half which surpassed our annual de-leveraging target of $1bn, we continued to aggressively reduce our net debt by INR 10,325 crores ($1.4bn) and gross debt by INR 5,640 crores ($774mn) during the quarter, taking the nine month reduction in net debt to INR 18,609 crores ($2.5bn) and in gross debt to INR 7,649 crores ($1.05bn). This has significantly improved the credit metrics of the company.”

Tata Steel’s dollar bonds issued by Abja were trading stable – its 5.95% 2024s were at 107.72, yielding 3.56%.

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