India Development News & Foreign Investment Opportunities

Tata Steel sells 70% stake in Singapore-Thai mills

Tata to focus on Indian market


Tata to focus on Indian market


Tata’s NatSteel in Singapore.

Tata Steel has signed an agreement to sell 70% stakes each in its two steel mills in Singapore and Thailand for US$480 million as a strategic to exist non-core markets and focus on fast growing demand in the home market.

NatSteel Holdings in Singapore and Tata Steel Thailand, through a Singapore-based fully-owned subsidiary TS Global Holdings signed a definitive agreement with China’s HBIS Group-controlled entity on 28 Jan 2019.

The Chinese steel major will pay US$327 million in cash to the Tatas and take over US$150 million combined debt of these companies.

Still the deal is 1.5 times the book value of these Tata companies.

This is the second major deleveraging that Tata Steel has done in as many years. It had merged loss-making European operations with ThyssenKrupp last year.

Under the agreement, signed in Beijing, TS Global will continue to hold 30% in the two companies.

Almost the entire proceeds from sale will be used to pare debt.

The 70% stake sale will marginally improve leverage for the India steel producer, rated BB-/Stable/– by Standard and Poor’s rating agency.

The divestment is in line with Tata Steel’s strategy to focus management bandwidth on India, one of the world’s largest growth markets for steel.

“We expect Tata Steel will continue to execute well on ramping up acquired capacities as it strives to maintain leadership in a high growth market,” the rating agency said.

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