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Home > Business > PTI > Report

Tata offer: Corus shareholders to vote on Mar 7

February 02, 2007 18:16 IST

Shareholders of Anglo-Dutch steelmaker Corus will meet on March 7 to vote on Tata Steel's 608 pence a share offer of takeover, which Tata Steel would fund through a combination of equity and loans.

Tata Steel managing director B Muthuraman said the Corus shareholders, attending the extraordinary general meeting, would also tender their shares at the rate of 608 pence per share.

"Hopefully, our financial structure will be ready by then and we will be in a position to announce it," he said, asserting that the acquisition of Corus was a 'good deal.'

Muthuraman, who arrived in the steel city this morning, said that "the company's shareholders and employees would realise that a good deal had been made."

Asked about the options Tata Steel was exploring to fund the deal, he said, "We are thinking many ways to raise funds as the company is extremely prudent as far as financial issues are concerned."

Tata Group chairman Ratan Tata had said after the Corus auction that Tata Steel's contribution to the $12.1 billion deal would be $4.1 billion.  Muthuraman also said the company was ready to pay even more than what it actually did for acquiring Corus.

"In fact, 608 pence per share was less than what we had in our minds to acquire Corus," Muthuraman said when asked whether the price was too high.

Allaying fears that funding of Corus acquisition would affect Tata Steel's balance sheet, he said the company would be formulating its financial structure in a very careful manner and that the major portion of the loan, to be taken by the SPV Tata Steel (UK) Ltd, would be drawn on Corus.

He said the fund for acquisition of Corus would be raised in a combination of loan and equity with equity to be provided by Tata Steel and the Tata Sons.

Asked whether Tata Steel would also export semi-products to Europe following the acquisition, Muthuraman said: "We do not want to hurt anyone in the UK and Netherlands. We want to make sure that jobs are protected.

"We will evaluate all possible alternatives and make Corus more competitive. In any case, we do not have slabs in our product range now and it will take 3-4 years to come. Only then we will decide," he said.

Muthuraman said that the strength of both the companies would benefit both as Tata Steel has the strength to master the operation, while Corus has highly skilled people, very good research and development and modern technology. It also has quality products like automobile, tinplate packaging and construction solution.

"When two high quality companies get together, each will benefit. We can improve our products and can bring the products of Corus, which are of a high quality, here," Muthuraman said.

The Tata-Corus saga

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