Tata Steel hikes stake in Canada's New Millennium

Tata Steel has bought additional stake in New Millennium Capital Corp for about Rs 89.25 crore, thereby increasing its shareholding in the Canadian mining company to 27.4 per cent.

Tata Steel today said its subsidiary Tata Steel Global Minerals Holdings bought 14.2 million common shares in the mining entity at a price of 1.40 Canadian dollars apiece, amounting to a total of 20 million Canadian dollars (about Rs 89.25 crore).

"After completion of the private placement, Tata Steel holds an aggregate of 40,429,270 common shares, representing 27.4 per cent of the outstanding common shares of New Millennium Capital," Tata Steel said in a statement.

Tata Steel Managing Director H M Nerurkar said the company is very pleased with its strategic investment in New Millennium and looks forward to expedite the "direct shipping ore (DSO) project".

"Since Tata Steel originally invested in New Millennium in October 2008, they have proven to be a supportive partner," New Millennium President and CEO Robert Martin said.

According to the statement, the net proceeds of the offerings would be used by the Canadian firm to finalise outstanding DSO agreements and environmental work and to initiate gravity and magnetic airborne geophysical surveys, among others.

The common shares issued to Tata Steel would be subject to a four-month hold period, that would expire on October 5, 2010.