Tata Steel loses race for Highveld
15 Jul 2006
Mumbai: Tata Steel has lost the race for a stake in Highveld & Vanadium with Russia's Evraz and investment bank Credit Suisse purchasing 24.9 per cent each in the South African company. Anglo American, which had put its 79 per cent stake in Highveld, said it is selling its stake to Evraz for $687 million.
Highveld produced 684,000 tonnes of rolled steel last year.
The Russian steel producer has agreed to acquire Anglo American's holding in a staggered transaction. Evraz will initially buy 24.9 per cent of Highveld, while Credit Suisse, its adviser, will buy a similar-sized stake from Anglo American. Evraz has options of buying Anglo American's remaining 29.2 per cent stake as also the shares owned by Credit Suisse.
While Tata Steel had acquired NatSteel of Singapore and Thailand-based Millennium Steel Ltd as also a stake in a coal property in Australia in the last two years, it is not known whether Tata Steel was keen on investing in a steel company that earns 60 per cent of its revenue from the production of vanadium.
World's No 1 steel maker Mittal Steel had pulled out of the race earlier.
It was also not clear whether Tata Steel had put in financial bids. Merchant banking sources said Bombay House was interested only in acquiring Highveld's steel business and had put in a conditional bid. Tata Steel also did not aggressively bid for the company which has a low steel production capacity.
