S&P Global Ratings Tuesday said Tata Steel's plan to sell majority stake in its Southeast Asia business will help the company reduce debt by about 3 per cent without impacting its business position.
As part of its strategic plan to exit non-core markets and focus more on the fast-growing home market, Tata Steel Monday signed an agreement to sell 70 per cent stake each in its two Southeast Asian arms to the HBIS Group of China for around USD 480 million.
Tata Steel's wholly owned subsidiary T S Global Holdings signed definitive agreements with HBIS Group to divest majority stake in its South-East Asia business.
"We expect the stake sale to bring in cash of USD 327 million and transfer out USD 160 million in debt. This would help reduce debt by about 3 per cent, without having a major impact on Tata Steel's business position," the US-based rating agency said in a statement.
The agreement to sell stake will also marginally improve leverage for the domestic steel giant, it said.
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