Tata steel to exit Riversdale Mining for Rs 5000 crore

Posted By: Religare
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Tata steel to exit Riversdale Mining for Rs 5000 crore
Tata Steel Ltd has decided to divest its entire 26.72 per cent stake in Riversdale Mining Ltd for A$1.06 billion (Rs 5,011.68 crore) to Rio Tinto after the announcement of delisting of the company.

Rio Tinto Jersey Holdings Limited has planned for delisting of Riversdale Mining following its increased shareholding to 73.20 per cent in the mining company. The stake value of Rs. 5000 crore represents 100% in value appreciation in less than four years. The investment is currently held by Tata Steel Global Minerals Holding Pte Limited, an indirect wholly-owned subsidiary of Tata Steel.

In March 2011, Tata Steel had acquired additional 2.9% to raise its stake in Riversdale Mining to 27.1%. The step was aimed at increasing its bargaining power as it seeks to assure coal supplies for group company Corus and to mitigate uncertainty in coal supply contracts.

However, Tata Steel will continue in the joint venture with Riversdale Mining in Mozambique through its current holding of 35 per cent in Riversdale Energy (Mauritius) Ltd, a subsidiary of Riversdale Mining, which owns coal assets in Mozambique . The Benga Project is a joint venture between Riversdale (65%) and Tata Steel Limited (35%) with Coal Resources of 4.0 billion tonnes and a Coal Reserve of 502 million tonnes.

Read more about: tata steel, commodities, steel, mining, bse, nse
Story first published: Monday, June 20, 2011, 13:33 [IST]
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