Tata Steel to Infuse $2.5 Billion in Singapore Arm for Europe Push
- Tata Steel to invest $2.5 billion (Rs 21,411 crore) in its Singapore-based subsidiary, T Steel Holdings.
- T Steel Holdings is 100% owned by Tata Steel; no change in shareholding post-infusion.
- In FY25, Tata Steel converted $565 million (Rs 4,822 crore) of loans to T Steel into equity.
Tata Steel has agreed to infuse capital of $2.5 billion (or Rs 21,411 crore) into its wholly-owned Singapore entity, T Steel Holdings. The investment is part of its efforts to boost European business operations and repay debt. The move has been approved by Tata Steel's board of directors.
The amount is more than the $1 billion threshold of overseas investment in a financial year, and as such, will require the RBI to give prior approval. T Steel Holdings is a holding company for Tata Steel's operations in the UK and Netherlands. Because the subsidiary is fully owned by Tata Steel, the equity structure of T Steel Holdings will not change after the investment.
The move comes after Tata Steel's recent conversion of $565 million (Rs 4,822 crore) in loans lent to T Steel into equity in FY25. The European businesses of the company are currently witnessing a major transformation due to regulatory changes with a focus on decarbonisation. This comprises the shutting down of old high-carbon emission assets and the use of electric arc furnace-based production systems.
Tata Steel said the future cash flows of its European business will depend on aspects such as the operation of carbon border adjustment (CBA) measures, access and cost of clean raw materials, and market premia for green steel. These developments are a part of Europe and the UK's larger movement towards low-carbon industrial methods.
