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Event: Tata Steel has announced that it will divest its 26.27% equity interest
in Riversdale Mining Limited (RIV AU) for a total consideration of A$1.06bn.
As per the press release, the decision has been taken as part of the ongoing
review of the strategic investments by Tata Steel and in light of recent Rio
Tinto's actions leading to its latest decision to delist Riversdale Mining Ltd.
DB view: Unless there is a specific clause in Tata Steel's JV agreement with
Riversdale, this decision does not impair Tata Steel's strategic stake (35%)
in the Mozambique coal JV with Riversdale (special SPV). The JV agreement
provides it with the rights to develop 25,000 hectares in Mozambique's coal
rich Moatize region including the Benga and Tete licenses, where the company holds rights to a 40% offtake in the above-mentioned reserves.
Divestiture of this equity investment without impairing its strategic investment will yield the company AUD1.06bn.
Raw material security has been at the core of Tata Steel's DNA and the
divestiture of its equity investment does not dilute either its strategic intent
or its ability to mine the reserve. Tata Steel had paid USD88mn in 2007 to
acquire a 35% stake in this JV.
Deutsche Bank AG and/or an affiliate(s) is acting as financial adviser to Tata
Steel in relation to Riversdale
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Event: Tata Steel has announced that it will divest its 26.27% equity interest
in Riversdale Mining Limited (RIV AU) for a total consideration of A$1.06bn.
As per the press release, the decision has been taken as part of the ongoing
review of the strategic investments by Tata Steel and in light of recent Rio
Tinto's actions leading to its latest decision to delist Riversdale Mining Ltd.
DB view: Unless there is a specific clause in Tata Steel's JV agreement with
Riversdale, this decision does not impair Tata Steel's strategic stake (35%)
in the Mozambique coal JV with Riversdale (special SPV). The JV agreement
provides it with the rights to develop 25,000 hectares in Mozambique's coal
rich Moatize region including the Benga and Tete licenses, where the company holds rights to a 40% offtake in the above-mentioned reserves.
Divestiture of this equity investment without impairing its strategic investment will yield the company AUD1.06bn.
Raw material security has been at the core of Tata Steel's DNA and the
divestiture of its equity investment does not dilute either its strategic intent
or its ability to mine the reserve. Tata Steel had paid USD88mn in 2007 to
acquire a 35% stake in this JV.
Deutsche Bank AG and/or an affiliate(s) is acting as financial adviser to Tata
Steel in relation to Riversdale
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