Tata Steel has divested its entire stake in Lanka Special Steels to EB Creasy and Company Plc for 433 million Lankan rupee (about ₹20 crore) in an all-cash deal.
Lanka Special Steel, a wholly-owned subsidiary of Tata Steel, is involved in the business of manufacturing and supplying hot dip galvanized wire and nail wire.
It has an installed capacity of 14,400 tonnes a year and annual turnover of LKR 1,569 million (₹74 crore) in FY-14.
Headquartered in Sri Lanka, EB Creasy & Company is engaged in logistic business, consumer goods manufacturing, automotive business, ‘home and industrial’ business, and renewable energy business.
As part of restructuring to bring down debt and reduce finance cost, Tata Steel has been exiting from its non-core and non-profitable ventures in the last few months.
The company sold its five per cent stake in the Carborough Downs joint venture in Australia for AUD 6.9 million (₹33 crore) to Vale as part of the Group’s ongoing financial initiatives to strengthen the balance sheet.
Late last year, Tata Steel signed a memorandum of understanding with the Geneva-based Klesch Group for the potential sale of its long products business in Europe and associated distribution activities. With production capacity of about five million tonnes of long products such as billets, wire rods and rails, the division accounted for 25 per cent of Tata Steel’s European operations.
Tata Steel UK Holdings had refinanced its bank debt through term loan and revolving credit facilities of €3.05 billion. The debt was originally incurred in relation with the acquisition of Corus Group Plc in 2007.
Back home, the company is on the verge of commissioning the first phase of three million tonne per annum greenfield steel plant at Kalinga Nagar in Odisha with an investment of ₹25,000 crore.
The shares of the company were up two per cent at ₹324 on Tuesday.