Calcutta, April 8: Tata Steel has sold its New Zealand distribution arm to a local player for Rs 140 crore in continuation of its policy to exit non-core assets.
The Indian company hived off Tata Steel International (Australasia) Ltd (TSIAL) to Steel & Tube, New Zealand’s leading supplier of steel products and services, for NZ$27.5 million.
TSIAL is one of the suppliers of stainless steel, engineering steels, and composite floor decks to the New Zealand and Pacific Island markets.
It also supplies colour coated and packaging steels, railway tracks and structural sections.
The company, a wholly owned subsidiary of Tata Steel Europe, posted a turnover of Rs 346.79 crore in 2012-13 while suffering a net loss of Rs 3.25 crore. It had total assets of Rs 258.77 crore and reserves of Rs 129.53 crore as on March 31, 2013.
Tata Steel had acquired the distribution business in New Zealand when it bought Anglo-Dutch steel maker Corus — later renamed as Tata Steel Europe — in 2007.
When the demand for steel dropped, the Indian company started to selectively dispose of non-core assets to cut the debt it had piled up while buying Corus. Steel & Tube, however, considers this particular asset of Tata Steel to be a “strategic fit”.
“In a year when both companies celebrate their 60th year in business, the acquisition represents an important milestone for both of us. Together, we are further strengthening our position as New Zealand’s leading steel distribution company, providing outstanding steel solutions to construction, manufacturing and rural businesses throughout the country,” Dave Taylor, CEO of the company, said in a statement to the New Zealand stock exchange.
He added that TSIAL was “an excellent strategic fit” for Steel & Tube.
“Acquiring its established stainless and engineering steel distribution business, alongside its ComFlor manufacturing capability, will ensure continued growth under the long-established and well respected Steel & Tube brand.
“Together we can deliver even more innovative products and offerings to our combined customer base. It’s all about growing, innovating and competing,” Taylor added.
Steel & Tube has a nationwide service and distribution network in 40 locations and is listed among the top 50 companies on the New Zealand Stock Exchange by market capitalisation.
Steel & Tube
- New Zealand’s
leading supplier of steel products and services.
- Distribution network in 40 locations
- Listed among the top 50 companies by market capitalisation on the New Zealand Stock Exchange
Tata Steel International (Australasia) Ltd
- A supplier of stainless steel,
engineering steels, and composite floor decks to the New Zealand and Pacific Island markets
- Subsidiary of Tata Steel Europe
- Turnover (2012-13): Rs 346.79cr
- Net loss: Rs 3.25cr
- Total assets: Rs 258.77cr
- Reserves: Rs 129cr (Mar 2013)