NEWS

Tata Steel in talks to buy Visa Steel’s ferro chrome unit

Wednesday, May 20, 2015

Steel major Tata Steel is active on the deal street, forging some crucial strategic transactions, Sources with direct knowledge suggest that Tata Steel is in talks to buy Visa Steel's ferro chrome unit to safeguard its chrome mining reserves by buying value adding facility. Visa Steel's 180,000 tpa ferro chrome unit at Kalinganagar, Odisha, for approx Rs 1,000 cr, a source indicated.

Visa Steel will have to embark upon a mega restructuring to conclude its transaction with Tata Steel. Sources suggest that Visa Steel is planning to demerge its company into three verticals - coke, ferro chrome and special steel. Ferro chrome unit will then be sold to Tata Steel.

A source pointed out, "Tata Steel wants to protect its Sukinda chrome mine which needs to value addition, but, it's still not clear whether Tata Steel has got 20 yrs lease extension or for 30 yrs. It makes sense only if it's for a longer period."

When contacted, Tata Steel did not offer a comment citing silent period. Visa Steel's spokesperson said, "no comment" to an ET NOW query. Stock of Visa Steel jumped up by 10% on the back of this news.

Tata Steel is also in advanced talks to buy Electrosteel Steel for an enterprise value of about Rs 8,000 cr, ET NOW had earlier reported on the deal talks. Reports also suggest that the steel major's talks with Klesch Group to sell long product units in Europe has entered the final stage. Tata Steel has called these reports 'speculative' in a stock exchange filing.

 

economictimes.indiatimes.com

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