Tata Steel is looking to raise about $ 3.1 billion via overseas loans to repay debt, reported The Economic Times.

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The firm is trying to raise funds to pay off existing debts prior to the merger of its European operations with Thyssenkrupp, the report said citing multiple sources with knowledge of the matter.

The new facilities will replace the existing debt held by its European businesses and the pricing would be done sometime in August, the report said.

Tata Steel did not reply to Economic Times' emailed query.

If the deal materializes it could turn out as this year’s biggest corporate refinancing programme, the report said.