Tata Steel has announced that it will sell a 51 per cent strategic stake in its subsidiary Tata Refractories Ltd (TRL) to Krosaki Harima Corporation (KHC), an associate company of Japanese steelmaker Nippon Steel.

Agreements to the effect were signed on Thursday, for the deal which valued TRL at Rs 1,130 crore. After the stake sale, Tata Steel would continue to hold a 26.46 per cent stake in TRL and remain an important customer.

“KHC will acquire 51 per cent equity stake out of Tata Steel's current 77.46 per cent stake in TRL. The transaction is based on an equity valuation of TRL of approximately Rs 1,130 crore and is subject to approval of relevant regulatory authorities in India and Japan,” said a company statement.

With this deal, Tata Steel expects TRL to get access to the latest technology and diversify its product offering. It will also give TRL an opportunity to access markets outside India.

Refractories are non-metallic materials that can retain their strength at extremely high temperatures and are used in the construction of furnaces, kilns, incinerators and reactors.

“KHC is a leading refractory player with global presence and advanced technology. As a key customer, (Tata Steel) hopes to benefit from improved refractory technology by this association with KHC,” it said.

Mr Yasuo Hamamoto, Representative Director and President, KHC said, “While Tata Steel is a technologically advanced steelmaker, TRL is the largest refractory manufacturer in India. This partnership is a big honour for us and we will put our best efforts to develop TRL in future.”

The over a hundred-year-old Tata Steel Group is among the top ten global steel companies with an annual crude steel capacity of over 27 million tonnes a year. It has operations in 26 countries and commercial presence in over 50. The Group posted a turnover of Rs 1,02,400 crore in 2009-10 and has over 81,000 employees across five continents.

Tata Steel shares at the BSE rose 0.60 per cent on Thursday to Rs 628.75.

Tata Steel will hold over 26 per cent stake in TRL

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