Tata Power to sell defence business to group firm Tata Advance Systems

The board of Tata Power board approved the sale of its defence business to Tata Advance Systems Limited, a wholly owned subsidiary of Tata Sons, at an enterprise value of ₹ 2,230 crore.

The move is part its exercise to monetize its non-core assets and improve the balance sheet.

Anil Sardana, CEO & Managing Director, Tata Power, said: “Strategic Engineering Division (SED) is a non-core business division of Tata Power. The company has been working on charting its next phase of growth, for which monetization of non-core assets is a critical step. This sale will also help in reduction of leverage.”

Of the total deal value, ₹1,040 crore will be payable at the time of closing of the deal. The remaining will be payble on achieving certain milestones, said a company release.

The deal is subject various regulatory and other approvals.

SED is a non-core defence electronics division of the company, engaged in business of indigenous design, development, production, integration, supply and life cycle support of mission critical defence systems. The key products include manufacturing and assembling missile launchers, electronic warfare, night vision systems and gun systems.