Tata Steel’s board on Wednesday approved of signing of a memorandum of understanding (MoU) with Dubai-based Synergy Metals and Mining Fund to divest 70% of its stake in Tata Steel Thailand.
The approval comes a day after Tata Steel announced that it will no longer be selling its South East Asian units including NatSteel and Tata Steel Thailand to China’s Hesteel with which it had signed definitive agreements in January for the same. The company terminated the agreements with Hesteel after the latter was unable to procure necessary regulatory approvals from the Hebei government in China. The approval was one of the key condition precedents for the transaction.
Tata Steel had also said that it will “immediately” start engaging for investors to divest its stake in the businesses as it wants to exit non-core subsidiaries and use the proceeds to bring down its group level debt, along with increasing focus on the domestic market.
According to the MoU approved on Wednesday, the Thailand business will be run in a 70:30 partnership. There was no announcement regarding the NatSteel business that has its facility in Singapore.
Synergy Metals and Mining Fund is a private equity fund focussed on investments in the metals, mining and natural resources sectors, according to information on its website.
