Tata Steel to get 45% stake in Thyssenkrupp joint venture

The changes happened after Thyssenkrupp's activist shareholders pressured management to squeeze better terms from the deal, which was originally a 50-50 split

 

 

Share Market News » Thyssenkrupp AG and Tata Steel Ltd. are closing in on a European steel joint venture after a last-minute change to the deal terms that won approval from Thyssenkrupp’s union.

In the revised deal, Thyssenkrupp will own about 55 per cent of the equity in the new company and Tata will have 45 per cent, according to people familiar with the matter. The changes happened after Thyssenkrupp’s activist shareholders pressured management to squeeze better terms from the deal, which was originally a 50-50 split. The voting rights will be equally split.

The talks over the joint venture have dragged on for more than a year and faced opposition from labour representatives, as well as activist shareholders. Thyssenkrupp’s labour representatives said on Thursday they would vote in favour of the joint venture, paving the way for it to go through.

Elliott Management Corp. and Cevian had argued that the terms needed to be improved after a long slump in Tata’s European steel profits. The new agreement represents an increase of more than 600 million euros ($695 million) for Thyssenkrupp shareholders compared with the previous deal, said the people, who asked not to be identified because the details aren’t public.

Changes to the deal follow weeks of mounting pressure on Thyssenkrupp’s Chief Executive Officer Heinrich Hiesinger by activist shareholders and labour representatives to get a better deal after profits plunged at Tata’s European steel business.

Even though the union will approve the deal, Thyssenkrupp shouldn’t be "scrapped like a used car," said Wilhelm Segerath, chairman of the General Works Council and a member of Thyssenkrupp’s supervisory board. Equity investors and labor unions are equally represented on Thyssenkrupp’s supervisory board, giving them both influence over the deal.

↓↓↓ Check Live NSE/BSE Stock Price ↓↓↓

Tata Steel Share Price

Lenders choose Tata Steel as preferred bidder for Bhushan Power & Steel

Tata Steel has already bagged Bhushan Steel, which has a capacity of 5.6 million tonnes.

Stock Market News » The committee of creditors (CoC) for Bhushan Power & Steel has decided on Tata Steel as the preferred bidder. The battle for Bhushan Power & Steel was closely fought between UK-based Liberty House, which submitted a late bid, and Tata Steel. People in the banking sector said that both bids were in close range initially.

"The difference was in the range of Rs 5-10 billion. Tata had offered around Rs 175 billion and Liberty Rs 180 billion as immediate upfront to financial creditors. But if you consider operational creditors, including employees, the Tata Steel bid looked slightly better. There is no standardised format to decide on what basis to select the bid," they said. Tata Steel's bid also has an additional capital infusion of Rs 75 billion. Subsequently, the CoC wanted comfort that Liberty House and Tata Steel can bring in the cash.

"In the case of Liberty House, finances were not fully tied up and the CoC felt the Tata bid was better, as it was fully backed by financial arrangement. The matter has been referred accordingly to the tribunal, which has to take a call," said the people cited above. They added that in terms of track record, the CoC felt Tata Steel was a more established player. A Liberty House spokesperson said there was no information on the bid.

The matter was slated for hearing in the National Company Appellate Law Tribunal (NCLAT). Last week, Liberty had presented bank guarantees before the lenders. The NCLAT, where the matter is being heard, had asked the CoC to go ahead with the selection process and keep its decision in a sealed cover. The final decision would be subject to the outcome of the NCLAT verdict.

↓↓↓ Check Live NSE/BSE Stock Price ↓↓↓

Tata Steel Share Price

Tata Steel to raise Bhushan steel stake to 75%, to acquire additional 2.5%

Tata Steel’s subsidiary Bamnipal Steel had acquired 72.65 per cent stake in Bhushan Steel in May this year after the company failed to repay its Rs 560 billion in debts.

Stock Market News » Tata Steel plans to buy an additional 2.5 per cent stake in Bhushan Steel from lenders, taking its stake from 72.65 per cent to over 75 per cent. This would make merger with Bhushan Steel easier.

Lenders have given the green light to the merger of Bhushan Steel with Tata Steel in the current fiscal year itself. “Indian banks hold more than half of the minority-held shares, and hence the voting on merger resolution would be a smooth affair,” said a banking source.

Tata Steel Ltd. (TATASTEEL) – Company History

Tata Steel is one of the world’s largest steel companies with a steel production capacity of approximately 27.5 million tonnes per annum (MnTPA) as on 31 March 2017. The company is a diversified steel producer with major operations in India Europe and South East Asia. The company has manufacturing units in 26 countries and a commercial presence in over 50 countries. Tata Steel is the second largest steel producer in Europe with a crude steel production capacity of over 12.1 million tonnes per annum.The company together with its subsidiaries is engaged in the manufacture and sale of steel products in India and internationally. They offer hot and cold rolled coils and sheets galvanized sheets tubes wire rods construction rebars and bearings. Tata Steel is one of the few steel companies that are fully integrated – from mining to the manufacturing and marketing of finished products.The company also involves in prospecting discovering and mining iron ore coal ferro alloys and other minerals; designing and manufacturing plants and equipment for steel oil and natural gas energy and power mining railways ports aviation and space industries; and agricultural implements. Further they offers alumina dolomite and monolithic refractories as well as silica refractories for coke ovens and the glass industry; manufactures bricks; sponge iron lumps and fines; and rolls for applications in integrated steel plants power plants and government mint as well as paper textile and food processing sectors.Tata Steel’s operations are grouped under six Strategic Business Units include Bearings Division Ferro Alloys and Minerals Division Agrico Division Tata Growth Shop (TGS) Tubes Division and Wire Division.

---

↓↓↓Check Live NSE/BSE Stock Price ↓↓↓

Tata Steel Share Price