Tata Steel today said it has sold its 26.27% stake in Australian coal miner Riversdale to global mining major Rio Tinto for AUD 1.06 billion ($1.11 billion).
"The sale consideration of about AUD 1,060 million (about Rs 5,074 crore) represents around 100% appreciation of value in less than four years since the first investment," the home-grown steel major said in a statement.
The Anglo-Dutch miner Rio Tinto holds 73.2% stake in Riversdale, which has an estimated 13 billion tonne reserves in its two projects in Mozambique - Benga and Zambeze.
Riversdale has been a takeover target for Rio Tinto since December 2010 when it put in a bid of AUD 16 per share to acquire a majority stake in the Australian mining firm.
Tata Steel, along with Brazilian steel maker CSN, has been continuously opposing Rio's buying stake in Riversdale, maintaining that it was more interested in getting coal from Riversdale to feed its European operations than making a quick buck.
CSN backed out from its earlier stand in April and sold its entire 19.9% stake to Rio Tinto.
Also Read
"As a part of the ongoing review of the strategic investments of the company, Tata Steel Board have considered the recent announcement of Rio Tinto Jersey Holdings 2010 to delist Riversdale following its increased shareholding to 73.2% in Riversdale.
"Tata Steel has decided that it would not want to hold its equity investment in Riversdale Mining, which is proposed to be delisted, without any joint venture agreement with the majority shareholder in unlisted Riversdale," Tata Steel said.
Tata Steel scrip today closed at Rs 553.15 per share, down 1.44% from the previous close.