Tata Steel has an installed capacity of around 4 million tonnes, and the acquisition will help it gain a foothold in the Chinese and Japanese markets. Tata Steel executives had made several trips to South Korea for discussions on the issue, sources close to the development said.
The opportunity for the South Korean foray came up when a consortium of investors, led by A K Capital, which had finalised a deal for acquiring the company for around $380 million, said it had failed to tie up the required funds.
The consortium then sought permission from a Seoul court for an extension of the deadline. The court rejected the request, leaving the field open to other bidders.
Hanbo has an accumulated debt of 6.7 trillion won ($5.69 billion). It reported sales of 377.7 billion won ($0.32 billion) for 2002-03.
While the Korean Asset Management Corporation holds 21.9 per cent in Hanbo, Korea Development Bank holds 18.1 per cent. Chohung Bank is the other institutional holder, with a 9.9 per cent stake.
It is not yet clear whether Tata Steel will strike a deal or participate in a fresh round of bidding.
