Tata Sponge Iron acquires Usha Martin's steel business for Rs 4,094 crore
Mumbai (Maharashtra) [India], Apr 10 (ANI): Tata Sponge Iron Ltd (TSIL), a subsidiary of Tata Steel, has completed the acquisition of Usha Martin's steel business for Rs 4,094 crore.
ANI
Apr 10, 2019 11:22 IST
Mumbai (Maharashtra) [India], Apr 10 (ANI): Tata Sponge Iron Ltd (TSIL), a subsidiary of Tata Steel, has completed the acquisition of Usha Martin's steel business for Rs 4,094 crore.
"TSIL completed the acquisition of steel business undertaking including captive power plants on April 9 pursuant to a cash consideration (after adjustment for negative working capital and debt like items) payable to Usha Martin of Rs. 4,094 crore," it informed stock exchanges in regulatory filings.
This is subject to further hold backs of Rs 640 crore, pending transfer of some of the assets including mines and certain land parcels, TSIL added.
On September 22, Tata Steel had announced signing of definitive agreements to buy Usha Martin's steel business. The acquisition cost was then pegged between Rs 4,300 to 4,700 crore.
TSIL later entered the steel business as part of a long-term strategy and Tata Steel identified it as the appropriate entity for the acquisition. Tata Steel holds 54.5 per cent of shareholding in TSIL.
Usha Martin’s steel business has a rich mix of carbon steel and alloy steel catering to automotive sector and high-end wire rod manufacturers.
The acquired business comprises a one million tonnes per annum alloy-based long products making facility in Jamshedpur, an operational iron ore mine, a coal mine under development and captive power plants.
The TSIL board had approved a plan to finance the buy through issue of rights share up to Rs 1,800 crore, external borrowings up to Rs 2500 crore and issue of non-convertible redeemable preference shares of Rs 1,000 crore. TSIL is debt-free with free cash reserves of about Rs 670 crore.
Usha Martin's gross revenue of the steel business in the financial year ended March 31, 2018 was Rs 3,441 crore. (ANI)
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