Hindustantimes wants to start sending you push notifications. Click allow to subscribe

TSL inks pact with Usha Martin to acquire its steel business

Kolkata | ByIndo Asian News Service
Sep 22, 2018 10:01 PM IST

Usha Martin Limited has been looking for buyers of its steel business in order to achieve the “objective of deleveraging the company”.

Tata Steel Limited (TSL) on Saturday said it has executed definitive agreements for acquisition of the steel business of debt-ridden Usha Martin for a cash consideration between 4,300-4,700 crore.

“...it has executed definitive agreements for acquisition of the steel business of Usha Martin Limited (UML) through a slump sale on a going concern basis,” the steel maker said in a regulatory filing.

Hindustan Times - your fastest source for breaking news! Read now.

The filing further said: “It is proposed that the steel business of UML will be acquired subject to transaction closing, for a cash consideration of between 4,300-4,700 crore (subject to various transaction adjustments).”

The transaction comprises one mtpa specialised alloy-based manufacturing capacity of UML in long products segment based in Jamshedpur, a producing iron-ore mine, a coal mine under development and captive power plants.

The acquisition is expected to be completed in the next 6-9 months.

The steel producer said the closing of the acquisition is subject to fulfilment of various conditions under the agreements. All the employees pertaining to the steel business will transfer as part of the acquisition.

According to the regulatory filing, Tata Steel or any of its subsidiaries or affiliates may carry out this acquisition.

The Kolkata-based speciality steel maker UML makes alloy steel long products such as wire rods, bars, blooms and bright bars mostly for commercial vehicles and tractors.

It had been looking for buyers of its steel business in order to achieve the “objective of deleveraging the company”.

The company on Saturday said its board approved the sale and transfer of the company’s steel business and the sale would help it in significant reduction of its debt.

UML’s steel business clocked a revenue of 3,441 crore on a standalone basis in the last fiscal, up from 3,055 crore in the previous fiscal.

As on March 31, 2018, its total debt stood at 4,600 crore. The company had repaid close to 540 crore in the last financial year, and was looking to repay close to 320 crore this fiscal, an UML official said.

Unlock a world of Benefits with HT! From insightful newsletters to real-time news alerts and a personalized news feed – it's all here, just a click away!- Login Now!
Stay informed on Business News along with Gold Rates Today, India News and other related updates on Hindustan Times Website and APPs
SHARE THIS ARTICLE ON
Start 14 Days Free Trial Subscribe Now
OPEN APP