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Tata Steel’s board has approved merging six subsidiaries and an associate company into it, seeking to consolidate the metals and mining business and simplify the holding structure.
Tata Steel Long Products, The Tinplate Company, Tata Metaliks, The Indian Steel & Wire Products, Tata Steel Mining, S&T Mining are majority owned by Tata Steel. The board also approved the amalgamation of TRF (34.11 equity holding), an associate company, into Tata Steel.
A Tata Steel statement said the consolidation would enhance management efficiency, drive sharper strategic focus and improve agility across businesses. The consolidation of downstream operations would enable growth in value-added segments by leveraging Tata Steel’s nationwide marketing and sales network.
“The move would also drive synergies through raw material security, centralized procurement, optimization of inventories, reduced logistics costs, and better facility utilization. On completion, there would be further opportunities towards reduction of overhead and corporate costs. Each of the proposed amalgamations will be value-accretive for shareholders,” said the statement.
The consolidation continues Tata Steel’s drive to simplify the group holding structure. Since 2019, Tata Steel has reduced 116 associated entities (72 subsidiaries have ceased to exist, 20 associates and joint ventures have been eliminated and 24 companies are under liquidation).
The board considered the proposal based on independent and valuation opinions. It followed the process laid down under the Companies Act, 2013 and Securities and Exchange Board of India Regulations, Tata Steel said.
The proposed merger was approved by Tata Steel board and all the amalgamating companies. The earlier scheme of amalgamation of Tata Metaliks into and with Tata Steel Long Products has been withdrawn.
There were changes in leadership of group companies as well.
In an exchange filing, Tata Metaliks said that Sandeep Kumar, managing director of the company, had expressed his intention to step down from the services of the company from the close of business hours of October 31, 2022, to take up a similar opportunity within the Tata Steel Group. And Alok Krishna would take charge as the managing director effective November 1, 2022.
Each scheme of amalgamation would now move into a defined regulatory approval process, Tata Steel said.
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First Published: Fri, September 23 2022. 08:17 IST