To acquire 93.71% stake in NINL for total consideration of Rs 12,100 cr
Tata Steel announced that Tata Steel Long Products, a subsidiary of Tata Steel has been announced as the winner of the bidding process to acquire a 93.71% stake in the 1 million ton per annum Neelachal Ispat Nigam (NINL) in accordance with the process being run by Department of Disinvestment & Public Asset Management (DIPAM), Government of India.While Tata Steel's growth in Flat Products would be pursued through the Kalinganagar and Meramandalli sites in Odisha apart from the existing capacity in Jamshedpur, NINL will become the hub for its Long Products business in the future. Located in the close proximity to Tata Steel's world class site of Kalinganagar, this is a strategic acquisition for the Tata Steel business in India with around one million tons per annum of steel-making capacity, 2500 acres of land for future growth and iron ore reserves of around 100 million tons. The acquisition of NINL provides a significant opportunity for Tata Steel to not only restart the one million ton per annum steel plant expeditiously but also begin work immediately to build a 4.5 million ton per annum state of the art long products complex in the next few years, and further expand it to 10 million ton per annum by around 2030. The acquisition of NINL is critical for Tata Steel to build such a dedicated long products complex which will also be best positioned to leverage synergies with the shared infrastructure of Tata Steel in the area. It is Tata Steel's endeavour to utilise its expertise in operating excellence, mining and project management to transform NINL into a state of the art, competitive and sustainable enterprise in the future. This investment also reflects Tata Steel's commitment to the state of Odisha and the communities around its operations.
The total consideration of Rs.12,100 crore reflects the enterprise value (including all recorded liabilities) as part of the acquisition of 93.71% equity stake in NINL. The acquisition is being financed through a combination of internal accruals and bridge loans which are expected to be paid down through internal generation of Tata Steel over the next few quarters. Tata Steel continues to be focused on its enterprise strategy to deleverage its Balance Sheet while it pursues its growth priorities. The transaction is scheduled for closure within the next couple of months as per the process timelines announced by DIPAM, Government of India.
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