Tata Steel will sell 51 per cent stake in Tata Refractories to Krosaki Harima Corporation, an associate company of Japan’s Nippon Steel, for Rs 576.3 crore.
The deal values Tata Refractories at Rs 1,130 crore and will reduce Tata Steel’s stake in the refractory company to 26.46 per cent from 77.46 per cent.
Both companies had signed a definitive agreement to induct Krosaki as a strategic partner in Tata Refractories, Tata Steel said in a statement. The deal is subject to approval of relevant regulatory authorities in India and Japan.
Krosaki is a leading refractory player, with global presence and access to advanced technology. With this deal, Tata Steel hopes the company will benefit, as it will get access to improved refractory technology, apart from the exposure to tap international markets.
Hemant Nerurkar, managing director of Tata Steel, said, “I am happy with this association with Krosaki Harima and I am sure this partnership will propel the business to greater heights in future.”
Tata Refractories is India’s largest company in this sector, and manufactures a range of dolomite, high alumina and silica refractories, which are used in linings for furnaces, kilns, incinerators and reactors. The company has its plant in Jharsuguda, Orissa, with an installed capacity of 305,000 tonnes per year. For 2009-10, it had reported a consolidated turnover of Rs 905 crore and earnings before interest, taxes, depreciation, and amortisation of Rs 101 crore.
Yasuo Hamamoto, representative director and president of Krosaki, said, “This partnership is a big honour for us and we will put our best efforts to develop Tata Refractories.”