Tata Group may spin off overseas steel assets: report

Mumbai: The Tata Group is looking at the option of spinning off its overseas steel assets, including the Anglo-Dutch steelmaker Corus, and get them listed overseas as it expands operations outside India, the Financial Times said in a report quoting company insiders.

An overseas listing would help the group raise fresh capital, the report pointed out.

Tata Steel's overseas assets include besides Corus, it bought last year for £6.7 billion, steel operations in Singapore, Thailand and Vietnam and further across the Asia-Pacific region.

Corus Steel, which was seven times the size of Tata Steel before acquisition, is the largest steel producer in Europe.Corus manufactures a range of products for diverse applications in engineering industries.

The company offers steel products for use in building and construction, heavy machinery and equipment, besides steels used in electricity generation, transmission, distribution. It is also a major supplier of rail tracks to both private and state-run networks in many countries.

Corus is a leading supplier of packaging grade steels, plates, cold-rolled steel strips as also  all kinds of copper, nickel, zinc, chrome and brass-plated strips.

It also provides a range of business services, including consulting and research and development services.

NatSteel is the dominant steel producer of Singapore and owns steel mills in China, Thailand, Vietnam, the Philippines and Australia. The business is focused on long products and has a cumulative capacity to produce about 2 million tonnes per annum of rebars, wire rods, pre-stressed concrete wires and strands.

NatSteel has a 26-per cent equity interest in Southern Steel Berhad, a 1.3-million tonne steelmaker in Malaysia.

NatSteel had an enterprise value of $486.4 million at the time of acquisition. The acquisition of NatSteel alone has helped Tata Steel increase its manufacturing footprint to seven countries in Asia.

Corus, which Tata Steel acquired lat year, is Europe's second largest steel producer with annual revenues of around £12 billion (over $23 billion) and a crude steel production of over 20 million tonnes.

The acquisitions have a strong strategic fit with Tata Steel's current expansion plans and there are likely to be significant synergy benefits in the future as a consequence of the transactions.

While NatSteel's business provides Tata Steel access to key Asian steel markets, including China, the acquisition of Corus extends Tata Steel's reach to the whole of Europe and the Americas.

Tata Sons, the holding company, is the controlling shareholder in Tata Steel, the world's sixth-largest steel maker, with a 34-per cent stake.

The report also said the group may not go for an immediate listing considering the adverse market conditions, and no urgent need for capital.

A listing of at least 10 to 20 per cent of all or part of the overseas assets held in Tata Global, which has an estimated enterprise book value of more than £13 billion, in London or Singapore, is possible as early as next year, sources pointed out.