Print

Mail

wiki links

Tata Chemicals asks for General Chemical loans

Tata Chemicals Ltd, part of India's second-largest business group, hired seven banks to arrange US$850 million in loans to fund the purchase of US-based General Chemical Industrial Products Inc, three people with direct knowledge of the deal said.

The Mumbai-based company appointed HSBC Holdings Plc, Standard Chartered Plc, ABN Amro Holding NV, Calyon, Mizuho Financial Group Inc, Rabobank Nederland and Bank of Nova Scotia to arrange the loan, which includes US$500 million for seven years and US$350 million of short-term borrowing, said the people, who declined to be identified as the information isn't public.

Tata Chemicals, India's biggest producer of salt, in January agreed to buy General Chemical for US$1 billion to become the world's second-largest maker of soda ash. Tata Chemicals bought UK-based Brunner Mond Group in December 2005, raising its soda-ash capacity to about 3 million tonnes, accounting for 8 percent of the global market.

Calls to Prashant Ghose, chief financial officer at Tata Chemicals, were not returned.

Tata Chemicals plans to pay interest that is 1.35 percentage points more than the London interbank offered rate for the seven-year loan, said the people. Three-month Libor was set at 2.94 percent on Friday.

Shares of the company have gained 2 percent since announcing the acquisition, outpacing the Bombay Stock Exchange's Sensex, which fell 12 percent.

Moody's ranks the company's foreign-currency debt Baa3, the lowest investment grade.
This story has been viewed 1338 times.