New Delhi Tata Steel Long Products Limited has completed the acquisition of state-owned Neelachal Ispat Nigam Limited. 12,100 crore, the Center said on Monday.
The strategic disinvestment of the Odisha-based steel maker was underway since January 2021. The acquisition was completed today following the transfer of 93.71% shares of all JV partners to the Tata Group firm. Neelachal Ispat, which manufactures pig iron and billets, was a joint venture of four central public sector enterprises, namely Metals and Minerals Trading Corp., Ltd. (49.78%), National Mineral Development Corp. (10.10%), Bharat Heavy Electricals Ltd. .68%), MECON Limited (0.68%), Odisha Mining Corp (20.47%) and Industrial Promotion and Investment Corp. of Odisha (12%). The remaining stake is with banks and insurance companies.
“The enterprise value paid by the strategic buyer is 12,100 crores. This payment has been utilized for settlement of dues of employees, operational creditors, secured financial creditors and vendors and for equity to be sold to shareholders as per the agreement, in accordance with the share purchase agreement,” the government said.
The government had initiated a strategic disinvestment process to sell the entire government stake to a private entity and transfer its management control.
Tata Steel Long Products was declared the winning bidder on 31 January and letter of award was issued on 2 February. The share purchase agreement was signed on March 10. The other bidders were a consortium of Jindal Steel & Power, Nalwa Steel & Power and JSW Steel.
Nilachal Ispat’s shareholders fulfill the terms of the share purchase agreement, including dues from operating creditors, dues to employees, and certification of operating and financial dues of vendors.
“The conditions have been fulfilled to mutual satisfaction,” the government said.
The sale also included transfer of mining rights and lease rights of land held by a public sector enterprise under the Ministry of Steel.
Tata Steel Chairman N. Chandrasekaran had said that it is looking to increase the capacity of Nilachal Ispat to 11 lakh tonnes per annum within the next one year.