Tata Steel sells entire stake in NatSteel Holdings for $172 million

Company retains wires business as part of downstream portfolio

T S Global Holdings (TSGH) Singapore, a 100 per cent indirect subsidiary of Tata Steel Limited, on Thursday executed definitive agreements with TopTip Holding Pte Ltd to divest its entire equity stake in NatSteel Holdings Pte Ltd for an equity value of $172 million (Rs 1,275 crore).

TopTip Holding Pte Ltd is a Singapore-based steel and iron ore trading company.

Based on the historical performance of the transacted business, the Enterprise Value to EBITDA works out to be about 13 times, said Tata Steel in its BSE filings.

However, the wires business of NatSteel in Thailand (Siam Industrial wires) has been retained by Tata Steel as part of the downstream wires portfolio.

The company said that the transaction has been closed today and that the consideration received, and will be used for reduction of off-shore debt.

In August 2019, Tata Steel had called off its plans to sell a majority stake in its South East Asia business to Chinese firm HBIS Group. The latter was to sell 70 percent to HBIS for $327 million in cash. The deal then was for entire South East Asia operations of Tata Steel which is operations in Thailand and Singapore.

In the current deal with TopTip Holdings, Tata Steel has exited part of Singapore business, while retaining the Thailand and wire business of Singapore.

Tata Steel, the country’s oldest steel producer, had bought NatSteel Singapore in 2004 for about Rs 1,300 crore.  

Shares of Tata Steel were trading at Rs 1,295 per share, down 0.11 percent from close of Wednesday on the BSE.