Tata Steel Ltd will sell its majority stake in an iron ore mine in South Africa to Switzerland’s IMR Metallurgical Resources AG for 366 million South African Rand (Rs 1,880 crore or $256 million at current exchange rates).
The steelmaker, part of the salt-to-software conglomerate Tata Group, informed stock exchanges on Monday that it has agreed to sell Black Ginger 461 Pty Ltd to IMR Asia Holdings Pte Ltd, a group company of IMR Metallurgical.
Black Ginger is a step-down unit of Tata Steel’s wholly owned indirect subsidiary TS Global Minerals Holdings Pte Ltd. It owns a 64% stake in Sedinberg Iron Ore Pty Ltd.
The stake sale, which was agreed upon on 18 October, will take about a year to complete. The proceeds from the sale will factor in adjustments for working capital and closing cash balance, Tata Steel said.
IMR Metallurgical is an international trading firm headquartered in Zug, Switzerland. It is involved in the global trading, marketing and financing of raw materials to the world steel industry.
Shares of Tata Steel on the BSE closed at Rs 544.95 apiece, down 1.56% from Friday’s close.
Tata Steel, the world’s 10th-largest steel producer according to the World Steel Association, has been consolidating steel businesses and selling assets in the UK and European Union.
It had acquired Anglo-Dutch company Corus Group Plc in 2006, but that bet backfired in the following years as steel demand fell in the aftermath of the global financial crisis. Cheap Chinese exports also dented the market the world over. Tata Steel has sold bulk of its European business over the past couple of years.
In India, however, Tata Steel has been buying assets from debt-laden companies unable to repay their loans.