Tata-Corus: Muthuraman says topline target $32bn
B Muthuraman, managing director of Tata Steel, said in a press meet in London that the new, combined entity of Tata Steel-Corus would have a capacity of 40 million tonne by 2011-12.
"The combined entity will have a turnover of $32 billion by 2011-12 with an EBIDTA margin of 25%," Muthuraman said.
He also discussed the six-pronged strategy outlined by Tata Steel in 2003 where the target was to increase capacity from 4 million tonne then to 30 million tonne by 2015.
Muthuraman was addressing the media in a meet attended by Tata Group chief Ratan Tata along with the top management team of Corus CEO Phillipe Varin and chairman Jim Leng.
Ratan Tata said the"offer" was the right offer, and was it was not "appropriate" to say anything more on the issue.
Kaushik Chatterjee, VP (Finance) of Tata Steel, said the transaction has been based on an enterprise value of $10.26 billion. Out of this Tata Steel will fund $3.5 billion, and the remaining would be raised through the SPV floated for the purpose.
Muthuraman said Corus generates cash flows that can service the debt of SPV, and the criterion for funding the deal was that no planned projects of Tata Steel, including greenfield projects, would not be affected.
Muthuraman again expressed his personal opinion that India should not be exporting iron ore. Answering a question on synergy, he said the new entity could look at countries that are rich in iron ore and where exports of iorn ore could be a natural fit.
Tata Steel managing director B Muthuraman said in London that there will be no change in Corus management.
"We are not going to stop with here. Corus will complete its own plans, and there will be no change in Corus managment," Muthuraman said.
He added that an integration committee will be put in place, and the buy will open new markets for the company.
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