Tata Steel’s TS Global Holdings has announced to sell the bulk of its interest in its South East Asian steel operations to a Chinese conglomerate, HBIS group, for a cash deal of $327 million.
The company in its regulatory filing said, “Tata Steel’s step-down subsidiary — T S Global Holdings Pte. Ltd. (TSGH) has executed definitive agreements to divest its entire equity stake held in NSH (100%) and TSTH (67.9%) to a company in which 70% equity shares will be held by an entity controlled by HBIS Group Co., Ltd (HBIS) and the balance 30% will be held by TSGH.”
Tata Steel also added, “TSGH is a wholly owned subsidiary (WOS) of T. Steel Holdings Pte. Ltd which in turn is a WOS of Tata Steel Limited.” As per Tata Steel’s statement, Rs. 5,181 crores of revenue were reported by NatSteel Holdings in FY18 and have a net worth of Rs. 1,039 crore. Whereas, Tata Steel Thailand reported revenue of Rs 4,361 crores in FY18 while its net worth is estimated at Rs. 1,303 crores as of March 2018.
HBIS Group is a Chinese state-owned firm which is amongst the largest steelmakers in the world and is a leading player in China’s home appliance and automotive steel industries as well as supplies steel for nuclear power, marine engineering, bridges and construction.
According to Koushik Chatterjee, CFO, Tata Steel, the transaction has been valued at 1.5 times the book value of the assets.