Tata Steel's board of directors has approved the signing of a memorandum of understanding (MoU) with Dubai-based Synergy Metals and Mining Fund to divest 70 per cent of its stake in Tata Steel Thailand.
Synergy Metals and Mining Fund is a private equity fund focussed on investments in the metals, mining and natural resources sectors.
The approval comes a day after Tata Steel announced that it will no longer be selling its south-east Asian units including NatSteel and Tata Steel Thailand to China's Hesteel with which it had signed definitive agreements in January.
On Wednesday, Tata Steel reported below expected numbers for Q1 FY20. The revenue grew by 1.3 per cent year-on-year but declined by 15.3 per cent quarter-on-quarter to Rs 35,947 crore.
Earnings before interest, tax, depreciation and amortisation (EBITDA) stood at Rs 5,377 crore, down 15.4 per cent year-on-year and 28.4 per cent quarter-on-quarter. The EBITDA margin contracted by 294 basis points year-on-year and by 275 basis points quarter-on-quarter to 15 per cent.
Reported net profit (including discontinued operations and after non-controlling interest) came in at Rs 711 crore while the reported profit after tax decline was 63.6 per cent year-on-year and over 70 per cent on a quarter-on-quarter basis.
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"The steel sector is facing significant headwinds which have affected spreads and overall profitability," said CEO and Managing Director T V Narendran.
"However, our strong business model in India has helped us counter the overall market weakness, including the slowdown in the automotive sector, by growing volumes in multiple customer segments," he said in a statement.
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