Tata Power today said its board has given nod for sale of its defence business to Tata Advance Systems for Rs 2,230 crore.
The move is part of the company's plan to monetise its non-core assets and improve the balance sheet.
"Tata Power, India's largest integrated power company, today announced that its Board has approved the sale of its Defence business to Tata Advance Systems Ltd, a wholly owned subsidiary of Tata Sons at an enterprise value of Rs 2,230 crore," the company said in a statement.
It said out of the enterprise value of Rs 2,230 crore, Rs 1,040 crore will be payable at the time of closing and Rs 1,190 crore on achieving certain milestones.
The deal will be subject to to government and other approvals, including the shareholders' nod.
"Strategic Engineering Division (SED) is a non-core business division of Tata Power. The Company has been working on charting its next phase of growth, for which monetisation of non-core assets is a critical step. This sale will also help in reduction of leverage," Tata Power CEO and MD Anil Sardana said.
SED is engaged in business of indigenous design, development, production, integration, supply and life cycle support of mission critical defence systems.
The key products include manufacturing and assembling missile launchers, electronic warfare, night vision systems and gun systems.
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