As part of its effort to reorganise business under four distinct divisions, Tata Steel has transferred its 51 per cent stake in Jamshedpur Continuous Annealing and Processing Company and 50 per cent stake in Tata BlueScope Steel to its wholly-owned subsidiary Tata Steel Downstream Products.
In November, Tata Steel had announced plans to reorganise its footprint in India under four clusters — long products, downstream, mining and utilities and infrastructure — to drive scale, synergies and simplification besides creating value for stakeholders.
Tata Steel held 73.03 crore equity shares of ₹10 each in joint venture company Jamshedpur Continuous Annealing and Processing. The net worth of JCAPC as considered in Tata Steel’s financial statements was ₹429 crore.
As part of the transaction, Tata Steel has received about 6.47 crore equity shares in Tata Steel Downstream Products at ₹129 per equity share being the fair value as determined by an independent valuer. Tata Steel Downstream Products will continue to remain a wholly owned subsidiary of Tata Steel, said Tata Steel in a statement.
Similarly, Tata Steel held 43.30 crore equity shares of ₹10 each in Tata BlueScope Steel. As on March-end, the net worth of the Tata BlueScope Steel as considered in Tata Steel books was ₹470 crore.
In lieu of transferring Tata Steel BlueScope shares, Tata Steel will receive about 10.94 crore equity shares of Tata Steel Downstream Products allotted at ₹129 per equity share.
Having grown in size, a lean structure will help Tata Steel tap synergies across businesses more efficiently and widen market reach besides bringing down legal cost, said an analyst.
Jamshedpur Continuous Annealing and Processing is a joint venture with Nippon Steel Corporation to produce high end automotive cold rolled steels inside Tata Steel Works at Jamshedpur.
The company has an annual capacity to produce 6 lakh tonnes Continuous Annealing and Processing Line to enable automotive OEMs (original equipment manufacturers) to address their strategic objective of increased localisation for automobile companies.
Tata BlueScope Steel is a joint venture between Tata Steel and BlueScope Steel, Australia.
The company is one of the leading manufacturers of colour coated steel, metal roofing sheets, industrial wall cladding solutions and steel buildings in India.
Tata BlueScope Steel operates in the SAARC (South Asian Association for Regional Cooperation) region in the field of coated steel, steel building solutions and related building products. The company has plants in Jamshedpur, Jharkhand; Bhiwadi, Rajasthan and Sriperumbudur, Tamil Nadu.