Tata's purchase of Stemcor iron ore assets falls apart
Singapore, 12 October (Argus) — Indian private-sector firm Tata Steel's deal to buy the Indian iron ore assets of trading company Stemcor has fallen apart after failing to win regulatory approval.
Tata agreed in December to buy Brahmani River Pellets (BRPL), which owns a 4mn t/yr pellet plant and a 4.7mn t/yr iron ore beneficiation plant in the eastern state of Odisha, for $130mn. But the proposed deal could not be completed by its deadline after the sellers failed to receive the necessary approvals, including from the Reserve Bank of India and income tax authorities, Tata said.
The assets were being sold by Stemcor-linked entities Moorgate Industries and Aryan Mining. BRPL is owned by Moorgate, which was formed after Stemcor's demerger in 2015.
UK-based steel trading company Stemcor was acquired by the US private equity firm Apollo in 2015 but the deal did not include BRPL.
BRPL's pellet sales have increased over the past year, together with those from other major Indian producers such as Jindal Steel and Essar Steel, on stronger Chinese buying.