Tata Steel offloads stakes in Thai, Chinese subsidiaries

Tata Steel's subsidiary, TSGH has agreed to divest its equity stakes held in China-based NatSteel Holdings and Tata Steel Thailand to a new entity which will be controlled by Chinese steel major, HBIS Group. This strategic partnership will help Tata Steel expand its South-East Asia business.

HBIS is a state-owned company in China and is amongst the world's largest steel producer. The company has a presence in China's home appliance, automotive steel sector, and also supplies steel for marine engineering, nuclear power and construction sectors. 

T S Global Holdings Pte Limited (TSGH), is a wholly-owned subsidiary of Tata Steel. TSGH will divest 100 per cent holding in NatSteel Holdings and 67.9% per cent stake in Tata Steel (Thailand) Public Company Limited to form a new entity.  According to the definitive agreement between  TSGH and HBIS, the controlling stake in the new entity will be with HBIS holding 70 per cent equity stake and TSGH holding 30 per cent stake.

The company's management believes that this collaboration with HBIS Group will expand its opportunities in South-East Asian region and provide access to resources and technical expertise of HBIS in the region. In terms of consideration from this deal, the TSGH will receive US$ 327 million, besides the 30 per cent equity stake in the new entity.

Meanwhile, the stock of Tata Steel was quoting Rs. 445.65 per share, down by 1.55 per cent on Monday on BSE.