TATA considering spin-off of international steel assets

The TATA Group is reportedly looking to spin off its international steel assets, including Corus, in an overseas listing that could raise billions of dollars to help bankroll the steel units expansion.

London, Sept.5 : The TATA Group is reportedly looking to spin off its international steel assets, including Corus, in an overseas listing that could raise billions of dollars to help bankroll the steel unit's expansion.

The Financial Times quoted group insiders as saying that TATA is exploring ways to raise capital, and a listing of its overseas steel assets is among the options being seriously considered.

"TATA has smart and diligent people kicking the tyres on this. They are aware that bundling together non-Indian steel assets would help to crystallise their value. No decisions have been made but the willingness to press ahead is rising," one insider said.

TATA Steel owns domestic assets as well as overseas companies. These include Corus, the Anglo-Dutch steel maker bought last year for 6.7 billion pounds; steel operations in Thailand and Singapore; and further assets across the Asia-Pacific region.

TATA Sons, the group's holding company, is the controlling shareholder in TATA Steel, the world's sixth-largest steel maker, with a 34 per cent stake.

A TATA Steel executive said the group had no immediate plans for a listing, particularly given the adverse market conditions, and no urgent need for capital.

One option being considered by executives is to list between 10 and 20 per cent of all, or some, of the assets held in TATA Global, which has an estimated enterprise book value of more than 13 billion pounds, in London or Singapore, as early as next year.

London-based investors are keen for exposure to the asset class and are familiar with the Corus business, while a Singapore-listed entity could benefit from being a regional steel champion.

Insiders said TATA executives may eventually decide against a spin-off because of volatile equity markets and instead seek to raise capital via extra bank financing, a private placement, or by further selling down its holding in TATA Consultancy Services.

ANI