Tata Steel loses out on Vietnam acquisitions

NEW DELHI: Tata Steel has lost a bid for acquiring two Vietnamese rolling mills as shareholders of their parent company have sought to dispose off the entire company and not just two particular units.

"We note that shareholders of Vietnam Industrial Investments (VII) have opted to pursue the disposal of the whole company instead of taking up the transaction to sell two of their assets (mills) to Natsteel Asia," a Tata Steel spokesman said.

The world's fifth largest steelmaker's Singapore subsidiary Natsteel was to acquire a 100 per cent stake in SSE Steel and 70 per cent in Vinausteel, the two units of VII. The transactions were to be completed by June.

However, VII informed the Australian Securities Exchange that the shareholders voted against the sale and purchase agreement at the annual meeting on June 29.

"At the seventh shareholders meeting on June 29 convened for the purpose of approving the sale of rolling mills to Natsteel Asia, the shareholders of VII voted against the resolution," the Tatas spokesman confirmed.

"However, Tata Steel would continue to play a major role in Vietnam and has already signed MoU with that government to set up a greenfield steel plant there," he said.

SSE has a capacity of 2.5 lakh tonnes while Vinausteel produced 1.8 lakh tonnes of reinforcing bars.

The deal ran into troubled waters when Prudential Vietnam Securities Investment made an unsolicited bid for VII. Its offer of 13.3 billion dollars was more than 10 per cent than that of Natsteel.

Vietnam government has already approved a joint venture between the domestic steel giant and Vietnam Steel Corporation to build a 4.5-million-ton unit worth 3.5 billion dollars at Ha Tinh province for which iron ore would be sourced from Thach Khe mines.