Tata Steel has transferred all its overseas assets, including Corus, into Tata Steel Global, a holding company based in Singapore. The 100% subsidiary will also be Tata Steel?s vehicle for fund raising and expansion abroad.
Tata Steel Global, which came into effect from Friday, August 1, has an enterprise book value of close to $13 billion. The company, earlier called Tata Steel Asia, will comprise Corus Plc, which Tata acquired last year, NatSteel (the Singapore company acquired by Tata Steel), Tata Steel (Thailand), and Mineral Holdings, which comprises mines acquired in Ivory Coast and Mozambique.
Briefing the media, Koushik Chatterjee, group chief financial officer, Tata Steel, said that Tata Steel Global will leverage its size and spread of assets to raise funds for buying raw material assets in the future. Tata Steel is striving for raw material security through joint ventures in Thailand, Australia, Mozambique, Ivory Coast (W Africa) and Oman.
?We are constantly on the look out for raw material assets. Given the size and spread of the assets under Tata Steel Global, we are in a better position to raise funds,? Chatterjee said. The holding company will be governed under the current structure of Tata Steel, he said.
Saying that theoretically it is possible to go for equity financing from Tata Steel Global, Chatterjee added that, in theory, it is also possible that the company could be listed. ?We can unlock value of this company when required,? he said. The Tata Steel stock closed up 3.92% on the Bombay Stock Exchange at Rs 680.65 on Friday on the back of robust Q1 results announced a day before.
In Thailand, the company is setting up a mini-blast furnace of 0.5 million tonnes. Last year, in the same quarter, the company had a profit of $7 million. This year, the profits rose to more than $60 million. The volumes also increased to 1.4 mt and are being scaled up to 2 million tonnes.
The company will also look at Vietnam to fulfill its demand for the Asian region, Chatterjee said. Tata Steel is looking at greenfield opportunities in Vietnam, and has signed an MoU with the government and the Vietnam Steel Corporation for a 4.5-mt capacity. These will be small, downstream projects, focused on finishing. ?The integration between NatSteel and Tata Steel Thailand is progressing well,? Chatterjee said.
Tata Steel also plans to raise Rs 1,000 crore ($235m) in debt, part of an announced Rs 12,000-crore expansion of its Indian operations, he said.
