Talks under way with bankers as Corus owners attempt to re-finance £3.5bn debt

​TALKS have started between Tata Steel and bankers over refinancing the massive debt incurred by the Indian company after buying the Scunthorpe steelworks and the rest of the Corus business.

Bosses in Mumbai paid £6.2 billion for Corus in April 2007 and more than three years later as much as £3.5 billion is reported to be still owing.

Koushik Chatterjee, the group’s chief finance officer, said in an interview with the Indian-based Business Standard: “Discussions with banks on several issues are an ongoing activity for us.

“Therefore, to discuss the potential of a refinancing scheme is part of my normal work activity.

“But that’s not closing tomorrow morning.

“The point is, we will want to ensure the financing activity is done efficiently and effectively keeping in mind today’s market prices.

“Financing activity in Tata Steel is a continuous process.”

Mr Chatterjee declined to reveal the names of the banks involved in the talks but confirmed Tata Steel Europe currently had £3.5 billion of debt on its books.

He added: “Our objective is to get the best capital structure and terms and to look at the total debt folio of Tata Steel Europe.”

Since last September the company is said to have repaid $1 billion of debt and also tied up finance for a three-million tonne expansion at its works in Jamshedpur, India – the biggest capital expenditure programme in the group’s history.

Last June, Tata clinched a £3.7 billion loans lifeline for the company at the peak of the downurn in steel production.

The boost came after a banking syndicate agreed to ease the repayment contract on the debt used by Tata Steel when it paid for Corus in April 2007.

The new arrangement was said to improve the financial position of the Scunthorpe steelworks and the rest of the UK business, with an immediate cash injection of £425 million.