Tata Steel Ltd said on Wednesday it has scrapped a deal to buy Brahmani River Pellets Ltd, a supplier of iron ore pellets, for Rs 900 crore ($132 million) including debt.
The steelmaker said in a stock-exchange filing that the transaction could not be completed because the sellers—Kolkata-based Aryan Mining and Trading Corp and Moorgate Industries Group—failed to get approvals from the Reserve Bank of India and tax authorities and settle matters related to foreign exchange laws.
“In the absence of clear approvals, the shares could not be transferred with a clear title,” it said.
The Tata Group company had signed a definitive pact to acquire Brahmani River in December last year to meet its ore requirements and improve the feed mix for its steel plants at Kalinganagar in Odisha and at Jamshedpur in Jharkhand.
Brahmani was set up by Moorgate in 2006. Moorgate was formed after the demerger of the Stemcor Group of companies as part of a restructuring approved by a UK court in 2015.
Stemcor was one of the world’s largest steel traders and one of Britain’s largest private companies before it underwent a restructuring after failing to repay debt it had taken on to buy iron ore assets in India.
Brahmani has a pellet plant of 4 million tonnes a year capacity and an iron ore beneficiation plant of 4.7 million tonnes capacity in Odisha. It also has a 220-km slurry pipeline that connects the two plants.
The Bhubaneswar, Odisha-based ore supplier posted revenue of Rs 452 crore in 2015-16, down sharply from Rs 1,068 crore the previous year.
Like this report? Sign up for our daily newsletter to get our top reports.