Tata Metaliks, part of Tata Steel, has entered into an agreement with Goa-based Fomento Resources for divestment of Redi facilities, as part of a strategic review of its portfolio. The deal size was Rs. 180 crore ($37 million) plus working capital at closing.
J. Sagar Associates advised Fomento with a team led by Partner Shiraj Salelkar along with Associates Aditya Rathi, Deepak Thakur, Sairekha Ram and Neha Bhosale.
Argus Partners advised Tata Metaliks with a team led by Partner Ramya Hariharan along with Associates Nilanjana Chatterjee and Sayak Chandra.
The Redi plant, with a capacity of 300,000 tonnes of pig iron, happened to be Tata Metaliks’ largest facility. In 2010-11, Tata Metaliks’ total production stood at 477,115 tonnes, according to Business Standard.
Dealcurry reports, the proceeds from the divestment would be utilized for reshaping the balance sheet and future strategic investment. The unit is being sold due to the perceived threat of closure of iron ore mines in Karnataka due to government action on illegal mining which will hit availability of raw material for Redi unit.
The Redi Unit was acquired by Tata Metaliks in 2006 through an auction. Apart from Redi, the company has operations at Kharagpur in West Bengal.
Fomento Resources has presence in iron ore minig in Goa, Karnataka and Maharashtra.