Neelachal Ispat Nigam acquisition: Tata Steel Long Products to raise ₹13,000cr

Tata Steel subsidiary Tata Steel Long Products today said its board has approved raising up to ₹13,000 crore via issuance of non-convertible redeemable preference shares on a private placement basis to its parent firm Tata Steel.

The funds raised would be used to meet the financial requirements to give effect to Tata Steel's acquisition of Neelachal Ispat Nigam Ltd (NINL).

“…the Board at its meeting held today, i.e., Thursday, February 10, 2022, considered and approved, inter alia, the proposal of fund-raising by way of issuance of unlisted Non-Convertible Redeemable Preference Shares (“NCRPS”) for an amount not exceeding ₹13,300 crore on a private placement basis, to Tata Steel Limited,” the company said in a stock exchange filing. 

Further, the company's board has also approved consequential changes to the Memorandum and Articles of Association of the Company and approved the convening of the extraordinary general meeting on March 7, 2022, through video conferencing or other audiovisual means for seeking shareholders’ approval.

Notably, on January 31, 2022, Tata Steel had won the bid to acquire a 93.71 per cent equity stake in Neelachal Ispat Nigam Limited (‘NINL’) for ₹12,100 crore, in accordance with the process being run by the Department of Investment and Public Asset Management (DIPAM). 

Tata Steel on Wednesday had said that its arm has accepted a letter of award (LoA) for the acquisition of a 93.71 per cent stake in NINL and added that the process for the buyout is likely to be completed in the next couple of months.

With PTI inputs