Tata Steel on Monday said its step-down subsidiary, T.S. Global Holdings Pte Ltd (TSGH), has signed definitive agreements with China's HBIS Group to divest a majority stake in its South East Asia (SEA) business.
"TSGH has executed definitive agreements with HBIS Group Co Ltd controlled entity to divest its entire equity stake in NatSteel Holdings Pte Ltd (NSH) and Tata Steel (Thailand) Public Co Ltd. (TSTH)," the steel maker said in a regulatory filing.
As per the agreements signed in Beijing, the divestment will be made to a company in which 70 per cent equity shares will be held by an entity controlled by the HBIS and 30 per cent by the TSGH.
Both Tata Steel and HBIS Group have been in discussions in relation to the future of the SEA business.
"The definitive agreement signed today (Monday) between the two companies is a significant milestone in our strategic relationship, offering the SEA business robust growth opportunities, given the access to resources, technical expertise and regional understanding of HBIS," Tata Steel CEO and Managing Director T.V. Narendran said.
According to the filing, the sale is expected to be completed in at least four months, subject to regulatory approvals.
Tata Steel also said the consideration received from such sale would be "$327 million and equity stake of 30 per cent in the entity held by HBIS Group and TSGH on 70-30 basis".
The Chinese group was established on June 30, 2008, by the merger of Tangshan Iron and Steel Group and Handan Iron and Steel Group of Hebei province.
It is amongst the largest steel makers in the world and a state-owned enterprise in China.
HBIS is a leading player in China's home appliance, automotive steel and supplies steel for nuclear power, marine engineering, bridges and construction with revenue in excess of $40 billion and total assets exceeding $50 billion.
--IANS
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