New Delhi: Tata Steel has received about $130 million (Rs 585 crore) in an arbitration settlement between its UK subsidiary and a consortium of buyers that broke an offtake agreement with its TCP plant in England.
Following the termination of the offtake agreement by a consortium of international buyers, Tata Steel last year mothballed Teeside Cast product (TCP) mill and sold the assets to Thailand’s largest steel producer Sahaviriya Steel Industries (SSI) for $469 million early this year.
“...a commercial settlement to all disputes relating to the offtake agreements was reached and on 21 June, 2011 Tata Steel completed a full and final settlement of claims with the consortium of former offtakers ... Tata Steel has received an aggregate sum of approximately $130 million,” Tata Steel said.
Tata Steel UK Limited (TSUK), had on 5 January, 2011 received a partial final award in its favour in the ongoing arbitration between TSUK and certain offtakers of the Teesside Cast Products business.
“Amongst other matters, the arbitral tribunal found that the offtakers did not validly terminate their offtake agreements,” the global steel giant which ranks among the world’s top 10 steel producers said.
The arbitration proceedings were held under the auspices of the ICC International Court of Arbitration.
TCP, in England, was mothballed a year ago after a four-member consortium, led by Italian major Marcegaglia, broke a 10-year offtake agreement with erstwhile Corus in May 2009.
Following the termination of the agreement, Tata Steel had sold the assets of TCP to Thailand’s largest steel producer SSI.
The assets covered by the sale included the Redcar Blast Furnace, the Redcar and South Bank coke ovens, TCP’s power generation facilities and sinter plant and the Lackenby steel making and casting facilities.
Helped by sale of TCP for about Rs 2,100 crore and better prices in European market, the company had posted 71.61% jump in consolidated net profit to Rs 4,177.14 crore for the fourth quarter ended 31 March.
Shares of the company closed at Rs 558 a piece on the BSE down 0.21% from its previous close.
Tata Steel Group has an annual crude steel capacity of over 27 million tonnes per annum (mtpa). It has operations in 26 countries and commercial presence in over 50 countries.