Kolkata: Tata Steel Limited on Friday said it has executed definitive agreements to acquire 100 percent equity of Odisha-based Brahmani River Pellets Ltd for over Rs 900 crore.
"..(The company) has executed definitive agreements to acquire 100 percent equity shares of Brahmani River Pellets Limited (BRPL) from Aryan Mining and Trading Corpn Private Ltd (AMTC) and other companies in the Moorgate Industries Group (MIG)," a company statement said.
"The transaction is based on an enterprise value of BRPL of Rs 900 crore plus closing adjustments and is subject to completion of certain condition precedents including regulatory approvals," it added.
The funding for the acquisition would be done from steel maker's internal cash flows.
"The location of the BRPL assets makes this very strategic to Tata Steel especially to our Kalinganagar operations and has significant operating synergies to make our Kalinganagar plant even more competitive for the future," said Koushik Chatterjee, Group Executive Director (Finance and Corporate).
BRPL owns a 4 mtpa pellet plant at Jajpur, Odisha and 4.7 mtpa iron ore beneficiation plant at the state's Barbil, with both connected through a 220 km underground slurry pipeline.
"The iron ore from our captive mine in the Joda and Khondbond region will get transferred in future through the slurry pipeline and reduce freight costs significantly," Chatterjee said.
He said that the 4 mtpa pellet plant and other infrastructure would enhance the operating efficiency and reduce costs of blast furnace operations in Kalinganagar.