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In an exclusive interview with CNBC-TV18 Koushik Chatterjee, the group CFO of Tata Steel said the steel prices were now significantly higher than it was last year, however, he sees a seasonal slowdown in August and expects iron ore prices to soften further.

Steel demand in Europe had fallen significantly due to the Euro crisis but demand now is reviving and much better than it was six months back as the Euro zone is regaining business confidence, Chatterjee said.

Tata Steel had acquired Europe’s second-largest steelmaker Corus in 2007, just before the global economic slump pared demand for steel and prompted banks to curtail lending.

The comapny board recently approved an allotment of 15 million shares and 12 million warrants on preferential basis to Tata Sons in order to raise funds for debt financing. This stock issuance would help the company to raise an aggregate amount of Rs 1,600 crore. The shares and warrants will be allotted at Rs 594 per share.

Commenting on the fund raising Chatterjee said that the company has completed debt financing for its Jamshedpur plant and completed placement of $ 300 million to Tata Sons.

Tata Steel board has approved allotment of 15 million shares and 12 million warrants on preferential basis to Tata Sons. The aggregate amount raised would be Rs 1,600 crore. Shares & warrants will be alloted at Rs 594 per share.

The stock issuance will allow the company to raise Rs 890 crore and warrants issuance will allow to raise Rs 710 crore. Warrants have standard conversion period of 18 months.

Tata Steel sold 27% stake in a Malaysian firm, Southern Steel Berhad. The steel major sold stake in Southern Steel for $ 72 million. The sale was part restructuring strategy. Transaction is subject to approval of Bursa Malaysia.

Steel prices have gone down 5-7% in last 1 month at $ 750/ton. Prices are expected to correct further. Raw material prices like iron ore, coaking coal have increased. Falling Euro helps increase the competitive advantage. Slowdown in Euro will lead to lower demand. Q4′FY10 EBITDA/ton of Corus stood at $ 94/ton. Some analyst have factored in losses in Corus at net PAT level, Q4′FY10 was first quarter where company made money in Corus on net level.

Corus has mothballed the Teesside Cast products. Its plans to sell TCP suffers setback. There is a buzz that Corus is in talks with a Thai steel maker, Sahaviriya Steel Industries.

Tata Steel’s debt stands at net debt $ 9.8 billion. Its net Debt Equity ratio stands at 1.85:1. Reports say that the company is in talks to re-finance its debt with banks. It is in talks to refinance 3.5 billion pounds debt with Citigroup Inc. RBS, Standard Chartered Plc & BNP Paribas are also part of the negotiations. The company’s existing debt is due to be paid from 2012 to 2014.