Tata Sponge aims to become ‘integrated steel enterprise’

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Kolkata | Published: June 22, 2019 1:46:42 AM

Tata Steel subsidiary Tata Sponge Iron is aiming to position itself as an “integrated steel enterprise” with a diversified business portfolio after completing the acquisition of the steel business of Usha Martin (UML).

The company is focussing on integrating the steel business with itself, including bringing about technological changes and skill enhancement of existing workforce.

Tata Steel subsidiary Tata Sponge Iron is aiming to position itself as an “integrated steel enterprise” with a diversified business portfolio after completing the acquisition of the steel business of Usha Martin (UML).

The company is focussing on integrating the steel business with itself, including bringing about technological changes and skill enhancement of existing workforce.

The company, wherein Tata Steel holds 54.5% shareholding, completed the acquisition of the steel business undertaking of Kolkata-based Usha Martin in April. UML’s steel business comprised a specialised alloy-based manufacturing capacity in the long products segment based in Jamshedpur, an iron-ore producing mine, a coal mine under development and captive power plants.

“UML’s steel business has the rich product mix of carbon steel and alloy steel which caters to automotive customers as well as produce high-end wire rods. On April 9, 2019, the company completed the acquisition of the steel business undertaking, including captive power plants and some other assets which comprise mines and certain land parcels of UML,” Tata Sponge Iron said in its annual report for 2018-19.

“We are now geared up for a new growth era, leveraging our existing strengths and building stronger synergies with the Tata Steel group. To move beyond manufacturing of sponge iron and to expand the product portfolio of the business, during the year, your board took a decision to foray into the long products business. As a step in this direction, we successfully completed the acquisition of the steel business undertaking of Usha Martin and are now focussing on integrating the business with that of your company, including bringing about process integration, technological changes, skill enhancement of existing workforce and other relevant cultural changes,” chairman T V Narendran said in his message to the shareholders.

The company completed the acquisition of steel business undertaking including captive power plants pursuant to a cash consideration (after adjustment for negative working capital and debt like items) payable to Usha Martin of Rs 4,094 crore, subject to further hold backs of Rs 640 crore, pending transfer of some of the assets including mines and certain land parcels.

Last month, the company, in a regulatory filing, said it had completed the registration of the transfer deed among UML, the company and Jharkhand, in relation to the transfer of the operative iron ore mine in favour of the company. However, the transportation of the iron ore extracted from the mine to its plant would take some time pending grant of permissions from the concerned authorities.

Following the buyout, the company’s board, in April, approved the change in its name to “Tata Steel Long Products” or such other name, as may be approved by the Registrar of Companies, subject to the approval of the members of the company and other regulatory authorities.

“We endeavour to position ourselves as an integrated steel enterprise with a diversified business portfolio. To align the name of your company with its new line of business, your board also proposed to change the name of your company from ‘Tata Sponge Iron Limited’ to ‘Tata Steel Long Products Limited’. The proposal for name change is being placed before you at the ensuing annual general meeting,” Narendran added in the annual report, published on Thursday. The AGM of the company will be held on July 15.

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