MUMBAI (Scrap Monster): Tata Steel Ltd has announced to merge with its unit Kalimati Investment Co. Ltd that will help to increase its stand-alone equity and shorten its structure.
According to Mr. Koushik Chatterjee, group executive director, finance and corporate, the merger process is under company’s consideration and the final decision would be announced later.
It is said that the boards of both companies have extended the last date of the scheme of amalgamation by a year to 31 March 2015. As per the Capitaline report, Kalimati has 8.26% stake in Steel Strips Wheels Ltd and 1.22% in CARE Ratings.
According to Mr. Alan Greene, vice-president and senior credit officer, corporate finance, the merger with Kalimati Investments would help Tata Steel to extend its equity reserves, adding Rs.450 crore in its blance sheet.
However, Tata Steel has a net debt of Rs.70,129 crore, the company acquired UK’s Corus Group Plc for $11.3 billion (around Rs.68,000 crore today) in 2007.
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