Tata Steel's stock ended over 2 per cent lower today as the company has kickstarted the sale of its cash-guzzling UK arm with divestment of Long Products Europe business to investment firm Greybull Capital for a nominal amount of 1 pound.
After falling 3.89 per cent to Rs 318.25 in intra-day trade, shares of the company finally ended at Rs 324.15, down 2.11 per cent on BSE.
On NSE, the stock fell by 2 per cent to close at Rs 324.50.
In terms of volume, 15.51 lakh shares of the company changed hands at BSE and over one crore shares were traded at NSE during the day.
The transaction is likely to conclude by June this year.
The embattled steelmaker appointed KPMG LLC as process advisor for the "thorough, but expedited sale" of its entire shareholding in its subsidiary Tata Steel UK, which includes Britain's largest steel plant at Port Talbot.
Tata Steel UK yesterday announced "signing of an agreement to sell its Long Products Europe business to family investment office, Greybull Capital.
"Sale for a nominal consideration, would be in exchange for Greybull Capital taking on the whole of the business, including assets and relevant liabilities, and securing an appropriate funding package."
Last month, Tata Steel put its entire UK business on the block, a development that has put thousands of jobs at risk amid a deepening crisis in the steel sector.
Meanwhile, India Ratings and Research has placed Tata Steel on 'rating watch' following its announcement of restructuring European operations.
"While cutting down losses by curtailing overseas operations would be a credit positive for TSL, the uncertain timelines associated with this goal could delay the expected recovery in its credit profile," Ind-Ra said in a statement today.
