Mumbai: Tata Sponge Iron Ltd (TSIL), a subsidiary of Tata Steel, has completed the acquisition of Usha Martin’s steel business for Rs 4,094 crore.
TSIL completed the acquisition of steel business undertaking including captive power plants on Tuesday pursuant to a cash consideration (after adjustment for negative working capital and debt like items) payable to Usha Martin of Rs. 4,094 cr,” it informed stock exchanges in regulatory filings.
This is subject to further hold backs of Rs 640 crore, pending transfer of some of the assets including mines and certain land parcels, TSIL added. On September 22, Tata Steel had announced signing of definitive agreements to buy Usha Martin’s steel business. The acquisition cost was then pegged between Rs 4,300 to 4,700 crore.
The TSIL board had approved a plan to finance the buy through issue of rights share up to Rs 1,800 crore, external borrowings up to Rs 2500 crore and issue of non-convertible redeemable preference shares of Rs 1,000 crore. TSIL is debt-free with free cash reserves of about Rs 670 crore. Usha Martin’s gross revenue of the steel business in the financial year ended March 31, 2018 was Rs 3,441 crore. Tata Steel holds 54.5 pc of shareholding in TSIL.