Mumbai, May 30 (IANS) Tata Steel has reached an agreement with lenders of Tata Steel UK for resetting the covenants on the 3.7 billion pound loan raised for the acquisition of Anglo-Dutch steel maker Corus.
This comes two days after group company Tata Motors announced a revision in the maturity deadline on the bridge loan for its acquisition of Jaguar Land Rover (JLR).
'As part of the agreement reached with the banks, testing of the facility's earnings-related covenants will be largely suspended till March 2010 and will resume with significantly higher flexibility,' said Tata Steel in a regulatory statement Saturday.
While the deal does not include any additional finance from the lenders, the level of interest will remain unchanged.
'The covenant resetting agreement demonstrates the strong relationship of Tata Steel group with its lenders and underlines the commitment of Tata Steel to its European operations,' said chief financial officer Koushik Chatterjee.
As part of the deal, the company will inject 425 million pounds (Rs.32,400 crore) into Tata Steel UK in a phased manner, of which 220 million pounds (Rs.16,800 crore) will be used to pre-pay debt and re-leverage European balance sheet.
Tata Steel UK acquired the Corus group in January 2007 for $12.04 billion (Rs.56,500 crore).
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