Tata Steel, India’s largest steel company, has sold its entire 26.27 per cent stake in Australian Securities Exchange-listed coal miner Riversdale Mining for $1.13 billion ($A1.06 billion), making two times its investment in four years. Tata Steel has sold its stake to British-Australian mining major Rio Tinto, which has already acquired 73.2 per cent stake in the firm and is in the process of de-listing it.
“Tata Steel has decided that it would not want to hold its equity investment in Riversdale Mining Ltd, which is proposed to be delisted, without any joint venture agreement with the majority shareholder in the unlisted company,” the company said in a statement. However, it will continue to hold 35 per cent stake in the subsidiary Riversdale Energy (Mauritius) Ltd, which owns coal assets in Mozambique, and will work with Rio Tinto in this venture. Tata Steel had entered into a venture with Riversdale to develop the Benga coal project in Mozambique.
The share price of Tata Steel closed at Rs 553.15 on Thursday, down 1.44 per cent at BSE in a weak Mumbai market.
The investment in Riversdale is currently held by Tata Steel Global Minerals Holding Pte Ltd, an indirect, wholly owned subsidiary of Tata Steel Ltd.
Rio Tinto had acquired a majority stake in Riversdale in April this year, after making a $4 billion takeover offer. Reports had suggested several suitors for the company, which specialises in coal mining in Africa, including a consortium of Indian state-run companies. Besides Tata Steel, Riversdale’s shareholders included players like Brazil’s third largest steel producer CSN and hedge fund Passport Capital.
Tata Steel has been able to raise significant capital this year by divesting stakes in various units, besides its share and bond issue. Recently, Tata Steel sold 26 per cent stake in Tata Refractories Ltd to Krosaki Harima Corp, a unit of Japan’s Nippon Steel, for $249 million (Rs 1,130 crore). It also completed a deal to sell certain assets of Teesside Cast Products to Sahaviriya Steel Industries, UK, a subsidiary of Thailand’s largest steel producer, in a deal valuing the business at $469 million.
In January, Tata Steel mopped up $770 million (Rs 3,500 crore) in a follow-on public offer which saw participation of investors like Abu Dhabi Investment Authority and Government of Singapore. The company followed it up with a $332 million (Rs 1,500 crore) perpetual bond issue, the first-ever issue of such hybrid corporate bonds in the country.