Mumbai: Tata Steel will raise $600 million, partly to refinance loans and partly to fund the capital expenditure of phase two expansion at its Kalinganagar plant, Koushik Chatterjee, CFO, Tata Steel, said. The company is focused on increasing free cash flow to reduce its debt burden, he added while addressing the media after the annual shareholders’ meeting here.

Chatterjee said the company has set a target of reducing gross debt by $1 billion in FY20, after Tata Steel's merger of its European operations with Thyssenkrupp AG fell apart following failure to meet Europe's antitrust requirements. Chatterjee said the company will aim to make its European operations self-sustainable.

Tata Steel has net debt of 1 trillion, as of March 2019. While Tata Steel's EBITDA (earnings before interest, tax, depreciation and amortization) levels have been improving, the profits from the domestic business will be used to pay off 85-90% of debt servicing on its European operations. However, last fiscal year, the company reported its first positive free cash flow in a decade.

N Chandrasekaran, Chairman, Tata Steel, said the company is aiming to reduce debt. “Our focus is on increasing capacity in India; we know the European assets haven't produced returns, but efforts are on," he added.