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Mumbai: Steelmaker Tata Steel Ltd said its board has approved issue of debt securities of up to Rs9,000 crore in order to refinance existing debt and to meet working capital requirements.

The issue will be in the form of non-convertible debentures (NCDs) on private placement or foreign currency or rupee-denominated bonds, or in a combination, in one or more tranches, Tata Steel said in a BSE filing late on Thursday. Earlier on Thursday, the company’s board had met to consider the proposal for fund raising.

“The funds will primarily be deployed towards re-financing the existing debt, capex/working capital requirements and general corporate purposes. The board of directors also authorized the Finance Committee of the board to determine and approve the timing and terms of such issue of securities," the filing said.

As on September 2016, Tata Steel had a consolidated debt of Rs82,777.51 crore. The company has in recent months divested certain overseas assets to cut losses. In February, the company posted its first profit in five quarters due to strong performance by its Indian business, a rebound in demand and higher pricing.

On Wednesday, Economic Times reported that Tata Steel plans to pay $663 million to its UK pensioners as one-time settlement under a new scheme Regulated Appointment Arrangement. Tata Steel declined to comment on the story.

The one-time payout could “remove the overhang of potential deficit contributions and the stock should likely re-rate", Shivraj Gupta, analyst at Citigroup Global Markets Inc., said in a note to clients.

In December, subsidiary Tata Steel UK reached an agreement with trade unions to replace its defined benefit pension scheme British Steel Pension Scheme with a defined contribution plan.

At Rs454.30 a share, Tata Steel’s shares were little changed on Friday morning on the BSE.

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