Renowned Indian multinational steelmaker Tata Steel has reportedly announced that it has signed a definitive agreement with Usha Martin Ltd. to acquire its steel business for INR 4,700 crores. Reports claim that the deal is scheduled to be completed in a period of six to nine months.
The leading multinational specialty steel manufacturer Usha Martin would be significantly reducing its debt by selling its steel business to Tata Steel, cite sources. According to a press release by Tata Steel, affiliates or any subsidiaries of the company would be carrying out the acquisition.
The press release also reportedly elaborated that any approvals required for the transfer of the immovable property would have to be secured from the Competition Commission of India and other regulatory and government authorities.
Both the parties would reportedly work together towards the fulfilment of conditions, which mostly are regulatory approvals that are necessary for the handing over of the business undertaking. Moreover, all the employees affiliated to the Usha steel business would also be transferred as part of the takeover. The acquisition of the steel business would be executed via a slump sale on a going concern basis, cite sources.
Reportedly, the steel business of Usha Martin consists of 1 million tons per annum (MTPA) alloy-based manufacturing capacity in the long product segment based out of Jamshedpur, a captive power plant, an iron ore producing mine and a coal mine.
For the record, the Tata Steel Group is one of the world’s largest steel company with around 27.5 MTPA of annual capacity of crude steel as of 31st March 2018. Reportedly, one of the subsidiaries of Tata Steel, Bamnipal Steel Ltd, had successfully completed the procurement of a controlling stake of about 72.65% in Bhushan Steel Ltd (BSL) in May.
Reliable reports claim, the acquisition and transaction structures would be determined soon.