Tata Steel subsidiary to acquire rolling mills in Vietnam

Tata Steel Ltd has announced that as part of the Company's focus on regional consolidation, NatSteel Asia Pte. Ltd. (NSA), a wholly owned subsidiary of the Company has entered into an agreement to acquire controlling equity stake in two rolling mills located in Haiphong, Vietnam, subject to certain conditions. The acquisition aggregating to 430,000 tpa finishing capacity will be made in the following two Companies:

a. 100% equity holding in a 250,000 tpa bar/wire rod mill in SSE Steel Ltd. and

b. 70% equity holding in Vinausteel Ltd. which produces 180,000 tpa reinforcing bar. (The remaining 30% equity is held by Vietnam Steel Corporation).

The enterprise value for the above acquisition is around US $ 41 million, subject to certain closing adjustments on the completion date. This transaction is likely to be completed by June 2007.

SSE Steel has one of the most modern rolling mills in Vietnam and the Vinausteel brand is one of the best known brands in Vietnam for reinforcement bars. The acquisition of these two mills will allow the Company to complement, strengthen and expand its current presence in Vietnam. The Company through its subsidiary presently operates a 100,000 tonnes p.a. reinforcing bar / wire rod mill in a joint venture with VSC in Thai Nguyen which is located about 70 km north of Hanoi.

The above acquisition demonstrates the Company's focus on de-integration strategy and will provide the Company with larger footprint in the growing South East Asian Region including Vietnam.

Source : Equity Bulls

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