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Tata Steel to create charges to borrow Rs 500 cr more

Our Bureau

MUMBAI, July 5

TATA Steel will be seeking its shareholders' approval for the creation of mortgages, charges and hypothecations for an additional borrowing margin of Rs 500 crore.

The company had a margin of Rs 1,220 crore for creation of charges. During 2001-2002, the charges created were for an amount of Rs 700 crore, resulting in a balance of Rs 520 crore.

In its notice to shareholders, Tata Steel said that it proposes to obtain further financial assistance from financial institutions and banks. "It is anticipated that the available limit of Rs 520 crore will not be sufficient to secure the financial assistance to be availed of during the coming years. Therefore, the resolution proposes creation of mortgages, charges and hypothecations of assets of the company up to a value not exceeding Rs 500 crores,'' Tata Steel said.

To secure such borrowings, the company would have to mortgage, charge or hypothetecate the assets and properties of the company.

Mr. Ratan Tata, Chairman, Tata Steel, in his statement to shareholders, said there have been some `promising signs of recovery in the steel industry' despite the uncertainties arising out of global terrorism and tensions on India's borders.

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