Tata Steel sells its stake in Riversdale for A$1,060mn :: Angel Broking,

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Tata Steel sells its stake in Riversdale for A$1,060mn
Tata Steel announced that it will sell its entire 26.3% stake in Riversdale Mining Ltd to Rio
Tinto for a consideration of A$ 1,060mn (`5,067cr). The sale represents a gain of ~100%
in less than four years. Tata Steel will retain its current holding of 35.0% in Riversdale
Energy, subsidiary of Riversdale Mining Ltd, which owns coal assets in Mozabique in order
to partially integrate its European operations. We believe the sale of Riversdale stake
should aid in part-funding Tata Steel’s ongoing expansion programmes.
We continue to maintain our positive stance on Tata Steel owing to its buoyant business
outlook, driven by a) higher sales volume in FY2013 on completion of its 2.9mn tonne
brownfield expansion project in Jamshedpur, b) raw-material projects at Mozambique and
Canada and c) restructuring initiatives at TSE. We maintain our Buy recommendation on
the stock with a SOTP target price of `799.