(Bloomberg) -- Tata Steel Ltd. is preparing a 115 billion rupee ($1.7 billion) loan to help fund its purchase of assets from Bhushan Steel Ltd., people familiar with the matter said.
The producer is in talks with banks about a six-month bridge facility, which it aims to refinance with a loan that would mature in about 15 years, according to the people, who asked not to be identified because the matter is private.
The acquisition would help Mumbai-based Tata in its goal to double production in five years, as it also plans further expansion at its Kalinganagar plant. The new facility would be the largest Indian local-currency loan since HPCL-Mittal Energy Ltd.'s 134.4 billion rupee loan, signed in May 2017, according to data compiled by Bloomberg.
Read more about Tata Steel getting approval for the asset purchase
Lenders in talks with Tata for the loan include Axis Bank Ltd., HDFC Bank Ltd., IndusInd Bank Ltd., Kotak Mahindra Bank Ltd., Standard Chartered Plc, State Bank of India and Yes Bank Ltd., the people said. A Tata Steel spokesman didn't immediately reply to an email seeking comment on the planned borrowing.
A Tata Steel unit sold 50 billion rupees of three-month commercial paper to also help fund the Bhushan asset purchase, separate people familiar with the matter said on Wednesday.
To contact the reporters on this story: George Smith Alexander in Mumbai at galexander11@bloomberg.net, Anurag Joshi in Mumbai at ajoshi53@bloomberg.net, Swansy Afonso in Mumbai at safonso2@bloomberg.net.
To contact the editors responsible for this story: Andrew Monahan at amonahan@bloomberg.net, Ben Scent at bscent@bloomberg.net, Timothy Sifert
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