Tata Steel Ltd has agreed to sell its entire stake in NatSteel Vina Co. Ltd (NSV), a Vietnamese company it runs as a joint venture with Viet Nam Steel Corp (VN Steel).
The Mumbai-based company said in a stock-exchange filing that it has signed a definitive agreement to sell its 56.5% stake in NSV to Thai Hung Trading Joint Stock Company.
The stake sale will fetch it approximately SGD 7 million (approximately $ 5.15 million or Rs 36.45 crore at current exchange rates), it added.
Tata Steel expects the sale to be completed within two weeks.
NSV is owned by NatSteel Holdings Pte. Ltd, which is in turn a wholly-owned subsidiary of TS Global Holdings Pte. Ltd. TS Global, meanwhile, is a subsidiary of T Steel Holdings Pte. Ltd, which is owned by Tata Steel.
Thai Hung Trading is multidisciplinary company, and specialises in the manufacturing of steel products, including billets and steel formwork. It also specialises in construction steel and metal scrap, and has a presence in the education and real estate too.
NSV, which was established in 1993, operates a hot rolling mill in Thai Nguyen that has a capacity of 2 lakh tonnes per annum. It supplies premium quality wire rods, and reinforcement bars to the construction industry. It has also participated in infrastructure and housing projects in the country.
The stake sale in NSV by Tata Steel comes after the company in January decided to sell a majority stake in its Southeast Asian businesses to a firm controlled by China’s HBIS Group Co. Ltd for $327 million (around Rs 2,326 crore).
The transaction represents another move by Tata Steel to reduce its foreign exposure. In September, it said it would shut parts of its non-core businesses in the UK, a move expected to cost 400 jobs. However, it has made moves to strengthen its domestic business. Last year, Tata Steel took control of the debt-laden Bhushan Steel and agreed to buy the steel business of Usha Martin.
It also joined hands with Germany’s Thyssenkrupp for its European business. However, that joint venture was rejected by European Union antitrust regulators in June this year, as they were concerned that the deal would have reduced competition in the segment and pushed up prices. The European Commission at the time said that the proposed deal had not done enough to allay its concerns on issues like tackling overcapacity.