Tata Sponge, a subsidiary of Tata Metal, has reportedly closed a deal to accumulate the metal enterprise of Usha Martin Ltd for round Rs 4,600 crore, a media report mentioned.
In response to The Economic Times, Tata Metal will take possession of Usha Martin’s metal unit at Jamshedpur on Tuesday. The report added that the proceeds from the deal can be saved in an escrow account of SBI and can be utilised to repay Usha Martin’s debt.
Usha Martin has a debt of round Rs 4,400 crore. The metal enterprise that Usha Martin is promoting to Tata Sponge features a 135 MW energy plant and a profitable iron ore mine and coal block, The Occasions of India said.
Shares of Usha Martin fell over 7 p.c on Tuesday on the again of experiences that Tata Metal is to take over the corporate’s Jamshedpur metal plant.
At 2.35 pm Usha Martin was quoting Rs 37.45, down 7.87 p.c on the BSE.
In September 2018, Tata Metal introduced it could purchase the metal enterprise of Usha Martin Ltd. The sale of metal enterprise to Tata Metal will assist the corporate in “vital discount” of its debt, Usha Martin had mentioned.
Final week, Tata Metal mentioned its output rose 23 p.c to 7.70 million tonne (MT) over the past quarter of 2018-19.
The corporate had produced 6.26 MT of metal throughout the identical quarter a 12 months in the past, Tata Metal mentioned in an announcement. Its India manufacturing stood at 4.47 MT in the course of the January-March 2019 quarter as in opposition to 3.07 MT within the year-ago interval.
“India operations achieved the highest ever crude steel production in 4QFY19 driven by better plant availability across the locations including ramp-up at Tata Steel BSL,” it mentioned.
In Might 2018, Bamnipal Metal (BNPL), a wholly-owned subsidiary of Tata Metal, had accomplished the acquisition of controlling stake of 72.65 p.c in Bhushan Metal. Tata Metal Ltd had received the bid to accumulate debt-laden Bhushan Metal Ltd (BSL) in an insolvency public sale. The bankrupt agency was among the many 12 careworn belongings the RBI had referred for NCLT proceedings final 12 months.
Tata Metal Group is among the many prime international metal corporations with an annual crude metal capability of 33 million tonnes each year (MTPA).
With PTI inputs
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