India’s largest private sector steel company by global revenues Tata Steel Ltd is selling off its New Zealand-based subsidiary Tata Steel International (Australasia) Ltd to a local player named Steel & Tube Holdings for NZ$27.5 million (Rs 144 crore or $24 million) in cash, as per a stock market disclosure.
The transaction is expected to be completed on April 14, Tata Steel said on Wednesday.
Tata Steel International (Australasia) supplies stainless steel, engineering steel and composite floor decks to the New Zealand and Pacific Islands markets. The company also provides ex-mill sales of colour-coated and packaging steels, railway tracks and structural sections.
The unit came under Tata Steel as part of a larger global deal where it acquired Anglo-Dutch steel firm Corus in 2007 for a record $13 billion.
Tata Steel International (Australasia), an indirect wholly owned subsidiary of Tata Steel, clocked a turnover of Rs 346.79 crore with a net loss of Rs 3.25 crore for the year ended March 31, 2013. As of March 31, 2013, it had total assets of Rs 258.77 crore and reserves of Rs 129.53 crore.
“TSIAL is an excellent strategic fit for Steel & Tube. Acquiring it’s established stainless and engineering steel distribution business, alongside its ComFlor manufacturing capability, will ensure continued growth under the long-established and well respected Steel & Tube brand,” Steel & Tube CEO Dave Taylor said in a separate statement.
Steel & Tube is a provider of a wide range of products like steel, stainless steel, piping, roofing, reinforcing, mesh, chain and rigging, fasteners, industrial products and more under its brands like Hurricane and Atlas.
The sale of the unit is part of Tata Steel’s plans to sell off non-core assets across the world to improve its balance sheet and bring down its huge debt. In 2011, Tata Steel sold its Teesside steel making unit in the UK to Thailand-based SSI Industries. Last year, it divested part of its investment in group firm Titan Industries and recently monetised its Borivali land parcel by selling it to Oberoi Realty in a large deal.
Tata Steel scrip closed the day at Rs 418.85 per share, up 3.18 per cent on the BSE in a strong Mumbai market on Wednesday.
(Edited by Joby Puthuparampil Johnson)