Tata Steel to take possession of Usha Martin unit
Tata Steel will take possession of Usha Martin’s Jamshedpur steel unit on Tuesday. This is Tata Steel’s second acquisition within a year after its takeover of Bhushan Steel via the NCLT process in April 2018. Tata Sponge will serve as the vehicle for the acquisition of the one million tonne steel business for which it issued preference shares to Tata Steel. The deal was signed in September last year for a consideration of Rs. 4,600 crore.
The proceeds of the acquisition are set to be kept in an escrow account with SBI and will be utilized for repaying Usha Martin’s debt. All of Usha Martin’s employees in the steel unit will be transferred as a part of the acquisition.
Tata Steel’s output increased 23 per cent to 7.7 million tonnes (MT) in Q4FY19 as against 6.26 (MT) during the corresponding quarter last year. After the acquisition of Bhushan Steel, Tata Steel’s consolidated India crude steel production capacity stands at 18.6MTPA.
On Tuesday, Tata Steel was trading at Rs. 548.35 per share, up 0.31 per cent on the BSE.