Koushik Chatterjee tipped to be Tata Steel's MD

Last Updated: Thu, Apr 18, 2013 04:46 hrs

Koushik Chatterjee, the group chief financial officer of Tata Steel, is likely to take over as the next managing director of the company when the current incumbent, H M Nerurkar, retires in October.

In the top management rejig at the steel giant, Chatterjee, 44, will oversee the global operations of Tata Steel in association with two senior presidents, Anand Sen and T V Narendran, who will look after Kalinganagar and Jamshedpur operations, respectively.

Tata Steel's European operations, now led by Karl-Ulrich Kohler, will continue as usual.

"The Tata Steel board will decide the MD of the organisation at the appropriate juncture," said a spokesperson.

According to insiders, Chatterjee shares a good rapport in the group, as well as with bankers, thanks to the fact that he was instrumental in raising finances for Tata Steel's $12.1-billion Corus acquisition.

Later, as Europe slipped into a slowdown, Chatterjee restructured the entire loan by raising low cost loans and help in selling assets such as Riversdale Mining in June 2011 for $1.12 billion.

Chatterjee will report to Tata Group chairman Cyrus Mistry, 44, who is building his team-A to take the group to the next level.

An email questionnaire to the Tata Group did not elicit any response till the time of going to the press.

Tata's finance wazir
A chartered accountant, Koushik Chatterjee joined Tata Steel's corporate finance team in 1995 in Jamshedpur and was transferred to the group's head office in Bombay House in 1999.

He later joined the group holding company, Tata Sons, in the group executive office under the direct supervision of the then chairman, Ratan Tata, and the finance director, Ishaat Hussain, and was promoted to general manager (corporate finance) in 2002. In Tata Sons, he was involved in mergers, acquisitions, privatisations and joint ventures. Chatterjee re-joined Tata Steel in August 2003.

With the announcement of the new Tata Steel Group after the Corus acquisition, he was appointed group chief financial officer from January 2008.

According to analysts, one of the biggest challenges before Mistry and Chatterjee will be to restructure Corus' European operations.

While the company is facing low demand in Europe, it operates high cost plants in the UK and the Netherlands.

The loans taken to acquire Corus will be yet another key challenge for the next managing director of the company.

In fact, in February, global brokerage house CLSA said that Tata Steel will have to sell either full or part of Corus to retire its debt and improve earnings. CLSA said that according to its analysis, Tata Steel's FY15 earnings could see a 30-150 per cent jump, depending on which Corus assets are sold. It also said that equity value could rise by $1.5-3.1 billion.

The report added the aim is to de-leverage the balance sheet and rid the portfolio of assets with questionable outlook including Corus.

"We see this change as a positive and, if successful, can achieve a big reduction in risk profile with large earnings and value accretion," it noted.

The Tatas had rejected the CLSA report, saying there are no plans to sell any Corus assets.

However, Tata Steel's shareholders are clearly not a happy lot as the firm's shares have lost 31 per cent in value since January, compared to 4 per cent fall in the BSE Sensex.

Tata Steel's stock closed at Rs 297 on Wednesday, compared to its one-year ago price of Rs 461 a share, down 36 per cent.

More from Sify: