Tata Steel Decreases Debt Funding For Corus Buy

Mumbai: Tata Steel, the world''s sixth- largest maker of the metal, decreased the amount of debt needed to fund the record $12.9 billion buy of Corus group to protect its credit ratings. Tata got a total of $640 million from affiliated companies after they converted warrants into shares. Tata said on April 18, it also mulls to sell $2.4 billion of stock to shareholders and overseas investors to fund the buy. The transactions will enable Tata to split the funding of India''s biggest acquisition equally between debt and equity at a time when interest rates in India have been increasing for a year.

Tata Sons, the holding company for the Mumbai-based Tata group, increased its stake in the steel unit to 27.63 per cent from 24.08 per cent after 28.5 million warrants were converted into shares at Rs 484.27 a piece. The 138-year-old group''s total holding rose to 33.77 per cent. The group, which has operations in more than 54 countries, comprises India''s biggest software developer, Tata Consultancy Services, and the largest truck maker, Tata Motors. Tata Steel''s $4.1 billion contribution to the Corus deal is equivalent to 55 per cent of its market value.