Tata Sons' to take $500 million offshore loan from BoA, Standard Chartered et al.

15 Sept 2022 , 02:41 PM

According to The Economic Times on Thursday, which cited persons familiar with the situation, Tata Sons will seek $500 million in offshore borrowings backed by Bank of America, SMBC of Japan, and Standard Chartered Bank as the business rolls over debt used to pay Tata Teleservices some years ago.

In the upcoming weeks, it is anticipated that the loan agreement, whose term will probably be five years, will be finalized. According to ET, the price will probably be 110—120 basis points more than the Secured Overnight Financing Rate (SOFR). In order to reduce debt at telecom business Tata Teleservices, Tata Sons took out three loan tranches in 2018. The company also apparently previously received a one-time exemption for the use of money, according to the report.

In July 2020, Bharti Airtel purchased Tata Teleservices Ltd.'s (TTSL) consumer mobile division. The change occurs at a time when Indian businesses are increasingly looking for financing in foreign markets. While HDFC Bank, India's largest private lender, raised $1.1 billion over two months ago, Piramal Pharma is now raising a loan of $225 million from international markets.

A market dealer told the newspaper that Tata Sons, one of India's top-ranked corporate debtors, "had opted to roll over the loan so it can utilize the funds in rupee terms for business growth." While the business is apparently concentrating on digital forays across industries, including technology, infrastructure, steel, telecom, and automotive, the Tata Group is also looking to engage in metro rail projects, notably in Pune.

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