Situation Analysis

Tata Steel is one of the world's largest steel companies with a global annual crude
steel production capacity of 34 million tonnes per annum (MnTPA). The company is
a diversified steel producer with major operations in India Europe and South East
Asia. The company has manufacturing units in 26 countries and a commercial
presence in over 50 countries. Tata Steel is the second largest steel producer in
Europe with a crude steel production capacity of over 12.1 million tonnes per
annum.The company together with its subsidiaries is engaged in the manufacture
and sale of steel products in India and internationally. They offer hot and cold rolled
coils and sheets galvanized sheets tubes wire rods construction rebars and bearings.
Tata Steel is one of the few steel companies that are fully integrated - from mining
to the manufacturing and marketing of finished products.The company also involves
in prospecting discovering and mining iron ore coal ferro alloys and other minerals;
designing and manufacturing plants and equipment for steel oil and natural gas
energy and power mining railways ports aviation and space industries; and
agricultural implements. Further they offers alumina dolomite and monolithic
refractories as well as silica refractories for coke ovens and the glass industry;
manufactures bricks; sponge iron lumps and fines; and rolls for applications in
integrated steel plants power plants and government mint as well as paper textile
and food processing sectors.Tata Steel's operations are grouped under six Strategic
Business Units include Bearings Division Ferro Alloys and Minerals Division Agrico
Division Tata Growth Shop (TGS) Tubes Division and Wire Division. They have
introduced several branded steel products including Tata Steelium (the world's first
branded Cold Rolled Steel) Tata Shaktee (Galvanised Corrugated Sheets) Tata Tiscon
(rebars) Tata Pipes Tata Bearings Tata Structural Tata Agrico (hand tools and
implements) and Tata Wiron (galvanised wire products).Tata Steel Ltd was
incorporated in the year 1907 with the name Tata Iron & Steel Company Ltd. In the
year 1911 the company commenced the operations of the first Blast Furnace or the
'A' Blast Furnace. In December 2 1911 the fist collieries were obtained and the first
cast of pig iron was produced. In they ear 1912 the first ingot of steel rolled out of
the Sakchi Plant and in October 1912 the Bar Mills started their commercial
production. Also the B Blast Furnace became operational during the year. In the year
1918 India's first steel (coke) plant was established in Jamshedpur.In the year 1925
the New Rail Mill Merchant Mill and Sheet Mill went into operation. In the year 1931
they opened an apprentice shop. In the year 1941 they started manufacture of
special steel for war purpose. They produced a wide variety of special steels required
for defense purposes including armoured cars called 'Tatanagars'. In the year 1943
Howrah Bridge was constructed from steel supplied by the company. In the year
1955 the company signed an agreement with Kaiser Engineers for two million tonne
expansion programme. In the year 1980 they started the first phase of the four-
phased modernisation programme. In the year 1984 the company introduced BOF
steelmaking which could produce liquid steel in forty five minutes when it took the
old open hearth furnaces close to five hundred under the first phase of
modernisation. During the year 1984-85 Indian Tubes Company Ltd was
amalgamated with the company. The second phase of modernisation was in the year
1988 which concentrated largely on the iron-making area. During the year 1993-94
-the company commissioned the Hot Strip Mill with the capacity of one million tonne
per annum which was the company's third modernisation programme. In the year
2000 the company inaugurated the 1.2 million tonnes Cold Rolling Mill Complex as a
first step towards expansion and modernisation. In January 2 2004 The Indian Steel
Wire Products Company was acquired at Jamshedpur. In June 4 2005 the company
signed an MoU for setting up a five-million tonne per annum Greenfield integrated
steel plant in the Jagdalpur district of Chhattisgarh. In July 2005 they formed a joint
venture with Blue Scope Steel Ltd Australia for quoted steel manufacturing facility.
In July 21 2005 the company acquired stakes in the Australian coal mines. In August
2005 the company set up Met coke manufacturing facility in West Bengal. In
September 19 2005 the company signed an MoU with the Government of Jharkhand
for setting up a 12-million tonnes per annum Greenfield integrated steel plant in the
Manoharpur and Chandil areas of Jharkhand. In December 14 2005 they signed
definite agreement with Cementhai Holding Company to acquire shares and invest
equity in the Milennium Steel Thailand. Also the name of the company was changed
from Tata Iron & Steel Company Ltd to Tata Steel Ltd with effect from May 19 2005.
In the year 2006 the company inaugurated India's first automated Jigging and
Hydrocyclone Plant with a 1.6 MTPA throughput at Noamundi Iron Mines. They
commenced the work on Ferro Chrome Plant by acquiring Rawnet Ferrous Industries
Pvt Ltd in Orissa a Ferro Alloys plant with a capacity of 50000 tpa of high carbon
chrome. They set up a Joint Venture Company with Larsen and Toubro Ltd for
developing an all weather modern deep water port in the state of Orissa on the
Eastern Coast of India. Tata NYK Shipping Pte Ltd a joint venture shipping company
between the company and Nippon Yusen Kabushiki Kaisha was set up to cater to dry
and break bulk cargo and also the shipping activities. In August 7 2006 the company
inaugurated the Roll Forming and Pre-Engineered Building Facilities of Tata
Bluescope Ltd at Pune.In April 2 2007 the company acquired Corus -- Europe's
second largest steel producer for consideration of USD 12 Billion which made Tata
Steel the sixth largest steel producer globally and the second-most geographically
diversified steel producer in the world. They also entered into an agreement for
acquiring controlling equity stake in two rolling mills located in Haiphorg Vietnam.
Also they signed a joint venture agreement with Riversdale Mining for Mozambique
coal project. In December 2007 the company and SODEMI (state owned company
for mineral development) entered into joint venture agreement for the development
of Mount Nimba Iron ore deposits in Ivory Coast (West Africa).In January 2008 the
company and the members of the Al Bahja Group a leading business house of Oman
entered into a Joint Venture Agreement for the development of the Uyun Limestone
deposits at Salalah in the Sultanate of Oman. Also they entered an agreement with
Steel Authority of India Ltd (SAIL) to establish a 50:50 joint venture company for
coal mining in India. In February 2008 they opened their fourth retail outlet
'steeljunction' at Behala. During the year 2008-09 the company completed the
expansion of crude steel capacity to 6.8 mtpa as part of their expansion programme.
Also they commissioned Sinter Plant No. 4 the 'H' Blast Furnace and the Continuous
Caster No. 3 at LD Shop-1 during this expansion phase. In June 16 2008 the
company and their wholly owned subsidiary Rawmet Ferrous Industries Ltd entered
into an agreement with Jasper Industries Pvt Ltd for setting up a coal based power
plant of 2 X 67.5 MW capacity in Orissa. the company through their subsidiaries
signed a Heads of Agreement memorandum with New Millennium Capital
Corporation (NML) a Canadian listed mining company aiming to develop iron ore
projects in Northern Quebec Labrador and Newfoundland provinces. As part of the
restructuring of the overseas holdings the company transferred their stake in Tata
Steel (Thailand) Public Company Ltd to Tata Steel Global Holdings Pte Ltd. The
company subscribed 3588022 rights shares of Tayo Rolls Ltd and consequently Tayo
Rolls Ltd has become a subsidiary of the Company with effect from December 01
2008.In October 22 2009 the company and Mineral and Metal Trading Company Ltd
signed an agreement to establish a 74:26 joint venture company for acquiring
development and operation of mines and processing of minerals and metals.Hooghly
Met Coke and Power Company Ltd was amalgamated with the company with effect
from April 1 2009. The construction of a warehousing shed and a building for a
power receiving sub-station had started at one corner of the plant area. They
increased the production capacity of Crude Steel from 6110000 tonnes to 6800000
tonnes Saleable Steel from 5840000 tonnes to 6500000 tonnes and Welded Steel
Tubes from 284000 tonnes to 288000 tonnes.In October 2009 the company entered
into agreement with MMTC Limited a Central Government undertaking and
established a joint venture company for acquiring developing and operating mines
and processing of minerals and metals. In November 2009 they signed a Joint
Venture Agreement with NML to advance the development of the DSO Project. In
January 2010 the company entered into an MoU with NMDC Ltd to explore the
possibility of acquisition exploration and development of mines extraction and
processing of minerals setting up integrated steel plants and other businesses of
mutual interest.In April 6 2010 the company entered in an MoU with Nippon Steel
Corporation (NSC) Japan for setting up a Continuous Annealing and Processing Line
at Jamshedpur India with 0.6 mtpa capacity. In June 2010 the company subscribed
to a private placement of Canadian $20 million by NML pursuant to which Tata Steel
Global Minerals Holding Pte Ltd holds a 27.4% stake in NML. In June 2010 the
company and Tata Metaliks Ltd entered into an MoU with the Government of
Karnataka for setting up an integrated steel plant of 3 mtpa in Agadi and Boodagatti
villages of Haveri District Karnataka. In August 2010 the company's subsidiary Corus
UK Ltd and Sahaviriya Steel Industries Public Company Ltd (SSI) signed an MOU
which sets out the scope of a potential transaction whereby SSI would acquire from
Corus the Teesside Cast Products (TCP) business in a transaction valued at
approximately USD 500 million.Tinplate Company of India Ltd became a subsidiary
of the company with effect from April 01 2011 consequent to increase in the
company's shareholding in the Tinplate Company of India Ltd from 42.88% to
59.45%. This increase is due to automatic and compulsory conversion of 3% fully
convertible debentures of Rs 100 each held by the company into equity shares on
April 01 2011.In April 2011 the company and Krosaki Harima Corporation (KHC)
signed definitive agreements to induct KHC as a strategic partner in Tata
Refractories Ltd (TRL). Under this arrangement KHC will acquire 51% equity stake
out of TSL's current 77.46% stake in TRL. As per the scheme of amalgamation
Centennial Steel Company Ltd a wholly owned subsidiary company was
amalgamated with the Company with effect from September 27 2011. In January
2012 the company secured a contract from Siemens Wind Power to supply 25000
tones of profiled steel plate for wind towers. Tata Steel will deliver 25000 tones of
profiled plate (cut into the desired shape) between April and September 2012.On 19
April 2012 Tata Steel announced that it has been awarded a high eight-figure US
dollar contract to supply pipe for Enterprise Products Partners L.P.'s new crude oil
export pipeline in the Gulf of Mexico's Keathley Canyon area. The contract will see
Tata Steel deliver more than 48000 metric tonnes of steel pipe from its 42-inch mill
in Hartlepool England for the Lucius Development Project which has the capacity to
produce in excess of 80000 barrels of oil per day.On 22 June 2012 Tata Steel
announced the completion of an important strategic project that makes it only the
second vertically integrated producer of grain oriented electrical steels in the
European Union.On 2 November 2012 Tata Steel unveiled 'Tata Astrum' a new brand
of its Hot Rolled products range at an event in New Delhi. The Astrum product range
will find application in the Automotive Earth Moving Equipment Railways Fabrication
Construction and Industrial Machinery segments.On 7 November 2012 Tata Steel
announced the opening its second aerospace service centre in China at Xi'an. The
new facility in Xi'an complements its existing operation in Suzhou opened in 2009
and aims to serve the growing demand for aerospace materials in the region.On 12
February 2013 Tata Steel announced that it has restarted its second blast furnace at
the Port Talbot steelworks in the UK following the completion of a 185 million
rebuilding project. The state-of-the-art new furnace is more efficient and will allow
Tata Steel to continue to meet the demanding requirements of UK and European
manufacturing industries.On 19 February 2013 Tata Steel announced that it has
been granted the core supplier status by French car manufacturer PSA Peugeot
Citro. On 10 June 2013 Tata Steel announced the successful completion of an
upgrade of its corrosion-resistant coating line in South Wales UK to improve and
expand the company's range of high-value high-formability automotive steels.On 19
June 2013 Tata Steel announced that it has secured a long-term agreement to
supply aerospace steels to Safran Group the world-class manufacturer of aircraft
rocket engines propulsion systems and aircraft equipment. The initial value of the
contract is in excess of 9 million per year with prospects for this to grow during the
life of the agreement.On 8 August 2013 Tata Steel announced that it won an order
to manufacture 60000 tonnes of high-quality rail for a new high-speed line linking
the two holy cities of Mecca and Medina in Saudi Arabia.On 21 October 2013 Tata
Steel announced that has won a contract to supply rail track and steel sleeper plate
to Network Rail for at least five years. Network Rail the company set up to operate
and maintain Britain's rail infrastructure has chosen to source more than 95% of its
rail from Tata Steel until 2019 with the option to extend this until 2024.On 22
October 2013 Tata Steel announced that it will build a Vacuum Induction Melting
(VIM) furnace at its Stocksbridge site in South Yorkshire UK to enable it to tap into
new market opportunities and develop innovative new products for the aerospace
and oil & gas industries. The cutting-edge VIM furnace will allow Tata Steel's
Speciality Steels business which already supplies steel to aircraft engine and airframe
makers to further develop relationships with its customers and expand its product
portfolio.On 23 October 2013 Tata Steel announced the commissioning of a new
heat treatment plant at its Hayange plant in the Lorraine region of France. The unit
will produce train track capable of lasting up to three times longer than standard rail.
The new facility will more than double the annual output of heat-treated rail from
55000 to 125000 tonnes. On 7 November 2013 Tata Steel UK announced the launch
of dent-resistant steel for car makers in Britain that helps to further reduce vehicle
weight. On 8 January 2014 Tata Steel announced that it has won a two-year
contract to supply more than 200000 tonnes of track to French rail operator SNCF.
The contract will see Tata Steel supply the majority of SNCF's rail requirements in
lengths of up to 108 metres from its plant in Hayange Northern France.On 16
January 2014 Tata Steel announced the launch of India's First Ferro Manganese
brand TATA FERROMAG and India's first Ferro Chrome brand TATA TISCROME. Tata
Steel will sell these two branded products in Gujarat Maharashtra NCR Rajasthan
Odisha and West Bengal which are the major consumption centres. Ferro Chrome
and Ferro Manganese are Ferroalloys widely used as alloying agents in production of
Carbon & Stainless steel. Ferro Chrome provides corrosion resistance thus increasing
the life of stainless steel while Ferro Manganese provides the necessary toughness
and hardness to steel.On 8 April 2014 Tata Steel announced that New Zealand's
Steel and Tube Ltd has agreed to acquire Tata Steel International (Australasia) Ltd.
for a cash consideration of NZ$27.5 million. Tata Steel International Australasia Ltd.
(TSIAL) is a New Zealand based company which is the leading supplier of stainless
steel engineering steels and composite floor decks to the New Zealand and Pacific
Island markets. The division also offers ex-mill sales of colour coated and packaging
steels railway tracks and structural sections.On 28 April 2014 Tata Steel announced
the commissioning of new Coke Oven Battery at its Jamshedpur steel manufacturing
facility thereby making the steel facility self-sufficient in coke requirement for stable
operation.On 27 June 2014 Tata Steel Europe officially inaugurated new slitting line
at its Ruhr-based Steel Service Center in Gelsenkirchen Germany. The new slitting
line is specially geared up to process advanced and ultra high-strength steels which
are used to manufacture demanding automotive applications used in chassis
suspension wheels and seats. They include advanced high strength steels with
unique forming capabilities for chassis and cold rolled advanced high strength steels
for light-weight seat components.On 1 July 2014 Tata Steel announced restructuring
proposals to improve the competitiveness of its South Wales UK steelmaking
business. The proposed changes would enable the UK Strip Products business to
compete in Europe's lower market demand era by reducing costs equivalent to the
loss of about 400 jobs in Port Talbot.On 25 July 2014 Tata Steel announced a
successful dual tranche Reg S issuance of USD 1.5 billion of unsecured bonds in the
international markets. It was Tata Steel's debut US dollar bond issuance and a part
of the company's long term financing strategy to raise capital internationally. On 4
August 2014 Tata Steel announced the launch of an innovative new product for
automotive manufacturers in response to market requirements for stronger and
lighter steels.On 11 August 2014 Tata Steel announced that it has signed a series of
contracts with Subsea 7 - one of the world's leading contractors in engineering
construction and subsea services to the offshore industry - to supply undersea pipes
to four separate North Sea projects.On 1 September 2014 Jamshedpur Continuous
Annealing and Processing Company Private Limited (JCAPCPL) announced the
inauguration of India's first Continuous Annealing & Processing Line a 600000 tonnes
per annum facility for manufacturing high-quality cold rolled sheets exclusively for
the automotive industry including outer panels and high tensile sheets. JCAPCPL is a
51:49 Joint Venture between Tata Steel Ltd and Nippon Steel & Sumitomo Metal
Corporation (NSSMC). JCAPCPL will source steel from Tata Steel.On 18 September
2014 Tata Steel announced that it has opened a new finishing line at its IJmuiden
steelworks in the Netherlands to strengthen the supply of high-value steels to the
automotive sector and other markets. Tata Steel invested 12 million euros in
Finishing Line 32 which will process up to 400000 tonnes of galvanised (corrosion
resistant) steel coil a year. The opening of the new finishing line has also freed up
Tata Steel's Cold Rolling Plant in IJmuiden which was responsible for finishing
galvanised steel. This will enable the company to increase the supply of uncoated
cold rolled steel to customers. The new finishing line follows the opening in IJmuiden
of the third hot-dip galvanising line in 2009.On 13 November 2014 Tata Steel
announced that it has completed a major upgrade of the Hot Strip Mill at its Port
Talbot steelworks in South Wales UK enabling it to further improve the quality of its
steel products used in a wide range of markets including automotive engineering
construction and domestic appliances. The upgrade of the Hot Strip Mill follows
investments totalling more than 250 million in state-of-the-art steelmaking and
processing technology at the South Wales operations.On 17 November 2014 Tata
Steel announced that it has commenced commercial production of GGBS world's
most sustainable building material. GGBS is used as a part replacement of cement
and has been the solution for high strength cost effective concrete in the developed
economies for last 50 years.On 3 February 2015 Tata Steel announced that it has
reached a significant milestone in the transformation of its European steel portfolio
with the launch of the 100th new product in its revitalised new product development
programme. On 2 February 2015 Tata Steel launched an innovative stronger
structural steel product which can reduce the construction time of new buildings.On
9 February 2015 Tata Steel announced the signing of a prestigious contract to
supply highly wear-resistant rail for the Crossrail project beneath the heart of
London. Tata Steel said at that time that it had already commenced deliveries to the
Crossrail project and will ultimately supply the project with more than 57 km of its
heat treated wear-resistant rail. In total 7000 tonnes of Tata Steel rail will be used to
create one of Europe's largest railway and infrastructure projects.On 1 April 2015
Tata Steel announced that it has completed the acquisition from SSAB of Sweden of
two service centres in Halmstad Sweden and Naantali Finland as well as the entire
remaining 50% stake in Norsk St l Tynnplater AS another strip products service
centre based in Frederikstad Norway. The service centres offer cutting-to-length
slitting and recoiling services to customers in the automotive construction and
electrical supplies industries as well as in heavy and light engineering.On 1 April
2015 Tata Steel announced that it has divested its entire stake in Lanka Special
Steels Limited (LSSL) to E.B. Creasy & Company PLC (EBCC) for a total consideration
of LKR 433 million (around Rs 20.4 crore) in an all cash deal. LSSL was a wholly
owned subsidiary of Tata Steel incorporated in Sri Lanka. It is engaged in the
business of manufacturing and supplying hot dip galvanized wire and nail wire with
an installed capacity of 14400 metric tonnes per annum. It had an annual turnover
of LKR 1569 million (Rs 74.0 crore) in FY 14.On 7 April 2015 Tata Steel announced
that it has completed a series of investments at its Steelpark site at Wednesfield in
the West Midlands that has strengthened the site's position as the UK's largest steel
processing centre. The start-up of a further multi-strand blanking line has completed
the expansion of Steelpark's new Light Gauge Service Centre which operates cut-to-
length blanking and slitting lines processing hot rolled cold rolled and galvanized
steel coils. On 14 June 2015 Tata Steel UK announced that it has launched a new
initiative in its efforts to resolve the pension dispute with its UK trade unions. The
company has approached Acas (Advisory Conciliation and Arbitration Service) to help
facilitate the next phase in talks between the parties. On 1 July 2015 Tata Steel
announced that the European Union (EU) has agreed to contribute 7.4 million euro
towards testing a groundbreaking new iron production process being developed at
Tata Steel's IJmuiden steelworks in the Netherlands. The six-month test campaign of
the HIsarna pilot plant in 2016 will establish whether the new technology can
produce molten iron in a stable way over a sustained period of time.On 5 August
2015 Tata Steel announced that negotiations about the potential sale of its European
long products business and associated distribution facilities to Klesch Group have
been discontinued. The company was in talks with Klesch following the signing of a
memorandum of understanding in October 2014. Tata Steel's Greenfield project at
Kalinganagar in the state of Odisha achieved a major milestone on 4 September
2015 with start of coke production from its Coke Ovens. The heating of Coke Ovens
was started on 19 May 2015.On 20 October 2015 Tata Steel's Long Products Europe
business announced proposals to stop production of steel plate. The decision was
made in response to a shift in market conditions caused by a flood of cheap imports
particularly from China a strong pound and high electricity costs.On 28 October 2015
Tata Steel announced the opening of its new UK research centre at the University of
Warwick's Science Park. The opening marks the first phase of Tata Steel's relocation
of its UK R&D work to the University of Warwick campus. On 18 November 2015
Tata Steel unveiled plans to create one of the world's largest solar energy projects of
its kind in the Netherlands. The company said at that time that it will mount 80000
solar panels on the factory roofs at its IJmuiden steelworks in Netherlands.Tata Steel
announced that its Kalinganagar steel plant was dedicated to Odisha on 18
November 2015. The Kalinganagar steel plant is the largest single-location greenfield
steel project in India. The first phase (3 MnTPA) of 6 MnTPA will produce world-class
flat lighter high-tensile strength steel and will augment Tata Steel's Indian
production to around 13 MnTPA of crude steel in India.T S Global Holdings Pte Ltd.
(TSGH) a subsidiary of Tata Steel incorporated in Singapore executed agreements
on 2 December 2015 for loan facilities of US$1.5 billion comprising a 5 year loan of
US$750 million and a 6 year loan of US$750 million. The proceeds of this loan will be
used to repay existing term loan facilities in TSGH. On 3 December 2015 Tata Steel
announced that its Long Products Europe business will continue to supply French rail
operator SNCF for at least five more years after a new deal was signed. Tata Steel
will supply the bulk of SNCF's 750000 tonne requirements of high-quality rail over
the duration of the renewed contract in lengths of up to 108 metres from its
Hayange facility. On 22 December 2015 Tata Steel UK announced the signing of a
letter of intent with Greybull Capital to enter exclusive negotiations for the potential
sale of its Long Products Europe business. On 18 January 2016 Tata Steel UK
announced cost-saving proposals to improve the competitiveness of its UK business.
On 22 March 2016 Tata Steel announced the first despatch of Tata Ferroshots from
its Kalinganagar steel plant. The product was commercially launched in India for the
first time. The end use of Tata Ferroshots is in electric arc furnaces induction
furnaces cupolas basic oxygen furnaces and foundries as a replacement of pig iron
scrap or DRI. On 24 March 2016 Tata Steel UK announced that it has reached an
agreement to sell its Clydebridge and Dalzell steel facilities in Scotland. The deal
involves the sale of the two plants to the Scottish Government which would then sell
them on to Liberty House. The Dalzell plate mill transforms a semi-finished steel slab
into a steel plate while the Clydebridge facility processes steel plate using a quench
and tempering technique.On 29 March 2016 Tata Steel board reviewed the
performance of the European business of the company more specifically of Tata
Steel UK. Following the strategic view taken by the Tata Steel board regarding the
UK business the Tata Steel board advised the board of its European holding
company i.e. Tata Steel Europe to explore all options for portfolio restructuring
including the potential divestment of Tata Steel UK in whole or in parts.On 11 April
2016 Tata Steel Europe formally commenced the process of divestment of its entire
shareholding in its subsidiary Tata Steel UK. On the same day Tata Steel UK
announced the signing of an agreement to sell its long products Europe business to
the family investment office Greybull Capital. The sale for a nominal consideration
would be in exchange for Greybull Capital taking on the whole of the business
including assets and relevant liabilities and securing an appropriate funding package.
The sale covers several UK-based assets including the Scunthorpe steelworks two
mills in Teesside an engineering workshop in Workington a design consultancy in
York and associated distribution facilities as well as a mill in northern France.On 9
May 2016 the Board of Tata Steel Europe announced that seven expressions of
interest submitted for Tata Steel's UK business have been immediately taken forward
to the next stage of the sale process. In the next phase of the sales process the
progressing interested parties will be given access to further business information
and management team presentations in order for them to rapidly progress their
interest to a binding stage.On 17 May 2016 Tata Steel announced that it has decided
not to go ahead with the proposed merger of Tata Metaliks Limited and Tata
Metaliks DI Pipes Limited with Tata Steel. The Scheme of Amalgamation between
Tata Metaliks Limited and Tata Metaliks DI Pipes Limited with Tata Steel was earlier
recommended by the Committee of Directors of Tata Steel in April 2013 and
approved by the company's shareholders on in May 2014. The decision not to go
ahead with the proposed merger was taken due to inordinate delay in obtaining
requisite regulatory and statutory approvals along with significant dilution in the
intended synergies that were envisaged in April 2013. Tata Metaliks is a subsidiary of
Tata Steel. On 14 September 2016 Tata Steel announced that its Kalinganagar
Odisha plant achieved yet another milestone with the flagging off of the first hot
rolled steel export rake from the plant. On 27 October 2016 Tata Steel announced
that Government of Quebec has joined as a strategic equity partner in its Canadian
iron ore mining venture Tata Steel Minerals Canada (TSMC). TSMC together with its
parent companies signed definite agreements for concluding investments of C$ 125
million as equity and C$50 million as debt with Government of Quebec's investment
entities Resources Quebec (RQ) and Investment Quebec (IQ) respectively totaling
C$ 175 million. The investment will result in an 18% equity stake for RQ in TSMC in
line with the carrying value of the investment in Canadian iron ore assets for Tata
Steel. Consequently the shareholdings of Tata Steel and New Millennium Iron will be
adjusted to 77.68% and 4.32% respectively. TSMC is developing iron ore deposits in
Quebec and Newfoundland & Labrador in Canada.On 27 October 2016 credit rating
agency Brickwork Ratings revised Tata Steel Limited's credit rating to BWR AA from
BWR AA+ for NCD and BWR AA- from BWR AA for the perpetual debt with a
negative outlook. In a statement Brickwork Ratings said that a sudden change of
guard at Tata Steel's holding company Tata Sons and Tata Group has not only
heightened the management risk for Tata Steel but also has exposed the company
to uncertainty over continuity of critical decisions on cost cutting and deleveraging
the Balance Sheet concerning the unprofitable UK operations and restructuring its
European business. Brickwork Ratings further said that unless Tata Steel takes
appropriate measures in this regard it may lead to further deterioration in the
financial profile of the company as also a rating action. On 28 November 2016 Tata
Steel UK announced the signing of a Letter of Intent with Liberty House Group to
enter into exclusive negotiations for the potential sale of its speciality steels business
for an enterprise value of 100 million subject to due diligence and corporate
approvals. The Letter of Intent covers several South Yorkshire-based assets
including the Rotherham electric arc steelworks the steel purifying facility at
Stocksbridge and a mill in Brinsworth as well as service centres in Bolton and
Wednesbury UK and in Suzhou and Xi'an China. On 30 November 2016 Tata Steel
announced the inauguration of its 55000 tonne per annum (TPA) ferro-chrome plant
in the Gopalpur Industrial Park in Ganjam district of Odisha.On 7 December 2016
Tata Steel UK announced that it has reached an agreement with trade unions on a
number of proposals that would structurally reduce risks and help secure a more
sustainable future for its UK business. The company and trade unions have also
agreed on the principle that subject to the structural de-risking and de-linking of the
British Steel Pension Scheme fund from the business Tata Steel UK will continue the
existing blast furnace configuration in Port Talbot until 2021. Further based on
achieving the necessary financial performance and cash flows as per the
transformation plan of the UK business the company will continue to invest across
the UK sites to enhance the competitive position of Tata Steel UK in the European
steel industry.On 7 December 2016 Tata Steel announced that its subsidiary TM
International Logistics (TMILL) has divested entire stake in its wholly owned step
down subsidiary TM Harbour Services Private Limited (TMHSPL) to Adani Ports and
Special Economic Zone Limited (APSEZ) for a total consideration of Rs 106 crore in
an all cash deal. TMHSPL is engaged in the business of providing tug services at
Dhamra Port and owns three tug boats.On 5 January 2017 Tata Steel inaugurated
the second phase of Cold Rolling Mill (CRM) Complex BARA at its Jamshedpur unit.
The phase II expansion of CRM BARA includes installation of 0.3 MnTPA hot rolled
skin passing mill (HSPM) to meet the increased demand of Hot-Rolled Pickled Skin
passed and Oiled products in the automotive sector for high-end customers. In order
to cater to the input requirement of HSPM the production capacity of the existing
pickling line has also been increased to 0.68 MnTPA from the designed capacity of
0.5 MnTPA. On 16 January 2017 Tata Steel announced that its Noamundi iron mine
in Odisha conducted pilot launch of drone application in mine monitoring thereby
becoming the first mine in the country to introduce drones for mine monitoring.On
25 January 2017 Tata Steel executed definitive agreements with Creative Port
Development Private Limited (CPDPL) and their promoters for the proposed
development of Subarnarekha port at Chaumukh village of Balasore district in
Odisha. As per the agreements Tata Steel will acquire majority equity stake in CPDPL
and the port development is envisaged through a wholly-owned subsidiary
Subarnarekha Port Private Limited (SPPL). On 21 February 2017 Tata Steel
announced that its Greenfield steel plant located in Kalinganagar Industrial Complex
in Jajpur district of Odisha has achieved yet another milestone with the hot metal
production at its blast furnace crossing 2 million tonne on 19 February 2017. The
blast furnace achieved the first million tonne production of hot metal on 9 October
2016.On 28 February 2017 Tata Steel announced the completion of the
commissioning of the ferro-chrome plant at Gopalpur Industrial Park in Ganjam
district of Odisha. The plant has an installed capacity of 55000 tonne per annum
(TPA). The Board of Directors of Tata Steel at its meeting held on 20 April 2017
approved issue of debt securities of up to Rs 9000 crore in one or more tranches.
The funds will be primarily deployed towards re-financing the existing debt
capex/working capital requirements and general corporate purposes. On 2 May 2017
Tata Steel UK announced the completion of the sale of its Speciality Steels business
to Liberty House Group for a consideration of 100 million. The sale covers several
South Yorkshire-based assets including the electric arc steelworks and bar mill at
Rotherham the steel purifying facility in Stocksbridge and a mill in Brinsworth as well
as service centres in Bolton and Wednesbury UK and in Suzhou and Xi'an China. On
23 June 2017 Tata Steel sold 8.35 crore shares of Tata Motors to the Tata Group
holding company Tata Sons at a price of Rs 452.80 per share (excluding brokerage
and STT). On 11 July 2017 Tata Steel announced that it divested its entire equity
stake in a 50% joint venture viz Tata Elastron S.A. in favour to the joint venture
partner Elastron S.A. for a total consideration of euro 0.368 million.On 14 July 2017
Tata Steel announced that it became the first steel company to enter into a long-
term tariff contract (LTTC) with Indian Railways. LTTC has been introduced by
Indian Railways to establish long-term contracts with customers with guaranteed
incremental revenue for Indian Railways. On 1 August 2017 Tata Steel UK
announced the completion of the sale of its 42-inch and 84-inch pipe mills also
known as the Submerged Arc Weld (SAW) mills in Hartlepool to Liberty House
Group. Earlier Tata Steel UK announced on 11 July 2017 that it had signed a
definitive sale agreement to sell its 42-inch and 84-inch pipe mills in Hartlepool to
Liberty House Group.On 20 September 2017 Tata Steel announced that it has signed
a Memorandum of Understanding (MoU) with Germany's Thyssenkrupp AG to create
a leading European steel enterprise by combining the flat steel businesses of the two
companies in Europe and the steel mill services of the Thyssenkrupp group. The
proposed 50:50 joint venture - Thyssenkrupp Tata Steel - would be focused on
quality and technology leadership and on the supply of premium and differentiated
products to customers with annual shipments of about 21 million tonnes of flat steel
products. The joint venture would have a pro forma turnover of about Rs 15 billion
per annum (Rs 115000 crore) and about 48000 employees spread across various
locations. The joint venture would be headquartered in Amsterdam Netherlands. The
proposed combination of businesses would be formed through a non-cash
transaction framework based on fair valuation where both shareholders would
contribute debt and liabilities to achieve an equal shareholding in the venture.On 11
October 2017 Tata Steel announced the expiry of the share purchase agreement for
the acquisition of 100% equity stake in Brahmani River Pellets Limited (BRPL).
Earlier on 23 December 2016 Tata Steel had announced the execution of definitive
agreements to acquire 100% equity shares of BRPL from Aryan Mining and Trading
Corpn Private Limited and other companies in the Moorgate Industries Group (MIG).
BRPL owns a 4 mtpa Pellet plant in Jajpur Odisha and 4.7 mtpa iron ore
beneficiation plant in Barbil Odisha connected through a 220 KM underground slurry
pipeline. On 11 October 2017 Tata Steel announced that it has acquired Rio Tinto's
smelter technology and intellectual property rights required to operate the HIsarna
process. HIsarna is a completely new technology in the steelmaking process which
combines Tata Steel's cyclone converter furnace with Rio Tinto's smelter.On 6
November 2017 Tata Steel announced that it has established India's largest Coke
Dry Quenching (CDQ) facility capable of handling 200 metric tonnes per hour at its
state-of-the-art Greenfield steel plant located at the Kalinganagar Industrial Complex
in Jajpur district of Odisha. CDQ is a heat recovery system to cool the hot coke from
coke ovens. It is one of the most renowned energy-efficient and eco-friendly
facilities in steel production where hot coke removed from coke ovens at a
temperature of approximately 1000 x C is cooled and kept dry with inert gas and the
resulting steam produced in a waste heat recovery boiler is used to generate
electricity.The Board of Directors of Tata Steel at its meeting held on 18 and 19
December 2017 approved the next phase of expansion of capacity at Kalinganagar
Odisha plant by 5 million tons per annum from 3 MTPA to 8 MTPA. The total capacity
of Tata Steel India operations following the expansion will be 18 million tons per
annum. The project will cost the company Rs 23500 crore and will be completed
within 48 months. The Board also approved a rights issue for an amount not
exceeding Rs 12800 crore for financing the expansion project for de-leveraging the
Balance Sheet and for general corporate purposes. On 18 January 2018 Tata Steel
announced the launch of two new products Tata Aggreto and Tata Nirman India's
first branded LD slag products for applications in road fly ash brick and clinker
making. On 19 January 2018 Tata Steel announced that the Executive Committee of
the Board of the company at its meeting held on 19 January 2018 approved rights
issue of equity shares up to Rs 12800 crore. The Committee approved simultaneous
but unlinked issue of up to 15.53 crore fully paid-up ordinary shares not exceeding
Rs 8000 crore and up to 7.76 crore partly paid-up ordinary shares not exceeding Rs
4800 crore. The rights issue of fully paid-up shares was priced at Rs 510 per share
and the partly paid shares at Rs 615 per share. The rights entitlement ratio was
fixed at 4 fully paid-up shares for every 25 shares and 2 partly paid shares for every
25 shares held on record date. On 19 January 2018 Tata Steel announced a
successful dual tranche Reg S issuance of USD 1.3 billion of unsecured bonds in the
international markets. The issue comprises USD 300 million 4.45 percent unsecured
bonds due on 24 July 2023 and USD 1 billion 5.45 percent unsecured bonds due on
24 January 2028 by Abja Investment Co Pte Ltd a wholly owned subsidiary of Tata
Steel Incorporated in Singapore. The proceeds of the bonds will be used to refinance
the offshore obligations of the company which will help de-risk the balance sheet
enhance financial flexibility diversify the investor base and improve the overall debt
maturity profile.On 2 February 2018 Tata Steel announced that it has concluded the
acquisition of 74% equity stake in Bhubaneshwar Power Private Limited (BBPL) from
JL Power Ventures Private Limited (JL Power). Tata Steel together with its 100%
subsidiary TS Alloys already held 26% stake in BBPL. BBPL owns a 135 MW
(2x67.5MW) thermal power plant at Anantapur Village in Cuttack District of Odisha.
The acquisition of BBPL will allow Tata Steel to increase its captive source of power
to meet its growing demand. Tata Steel had on 30 November 2017 executed
definitive agreements to acquire 74% equity shares of Bhubaneshwar Power from JL
Power Ventures for a consideration of Rs 255 crore. On 14 February 2018 West
Bokaro division of Tata Steel commissioned the primary crushing plant 3 (PCP 3).
PCP 3 has been set-up with an objective of augmenting coal beneficiation at the
colliery. On 7 March 2018 Tata Steel announced that it has received a formal
communication from the Resolution Professional of Bhushan Steel Limited (BSL) that
it has been identified as the highest evaluated complaint resolution applicant to
acquire controlling stake of BSL under the Corporate Insolvency Resolution Process
(CIRP) of the Insolvency and Bankruptcy Code 2016 (IBC) as decided in the meeting
of the Committee of Creditors (CoC) of BSL on 6 March 2018.In June 2018 the
company had signed definitive agreements with thyssenkrupp to combine its steel
businesses in Europe to create a 50:50 pan-European joint venture company
focussing on customer centricity technology and sustainability.On March 1 2019 the
Company allotted 43150 - 9.8359% Unsecured Redeemable Rated Listed Non-
Convertible Debentures (`NCDs') having face value Rs 10 lakh each for an amount
aggregating to Rs 4315 crore to identified investors on private placement basis.On
October 18 2018 T S Global Minerals Holdings Pte. Ltd. entered into an agreement
with IMR Asia Holding Pte Ltd a group company of IMR Metallurgical Resources AG a
global metals and mining group headquartered in Switzerland to divest its entire
stake in its wholly-owned step down subsidiary Black Ginger 461 Pty. Ltd. which in
turn holds 64% in Sedibeng Iron ore Pty Ltd South Africa the operating company.
The divestment was completed on February 18 2019. During the year 2018-19 the
Company on a consolidated basis spent Rs 9091 crore on capital projects across
India Europe and Canada largely towards essential sustenance replacement and on-
growth projects in India (Kalinganagar plant and Tata Steel BSL Limited) and in the
Netherlands.During the year under review the Company through its wholly-owned
subsidiary Bamnipal Steel Limited (`BNPL') completed the acquisition of controlling
stake of 72.65% in Bhushan Steel Limited (renamed Tata Steel BSL Limited)
(`TSBSL') pursuant to the Resolution Plan (`RP') as approved by the National
Company Law Tribunal vide its Order dated May 15 2018 under Corporate
Insolvency and Resolution Process (`CIRP') of the Insolvency and Bankruptcy Code
2016 (`IBC').In March 2019 the Company acquired 10700000000 - 11.09% Non-
Convertible Redeemable Preference Shares of face value Rs 10 each aggregating to
Rs 10700 crore in two tranches and 9000000000 - 8.89% Optionally Convertible
Redeemable Preference Shares of face value Rs 10 each aggregating to Rs 9000
crore in two tranches of TSBSL.Further on April 25 2019 the Board of Directors of
the Company approved the amalgamation of BNPL and TSBSL into and with the
Company by way of a composite scheme of amalgamation and have recommended a
merger ratio of 1 equity share of Rs 10 each fully paid up of the Company for every
15 equity shares of Rs 2 each fully paid up held by the public shareholders of
TSBSL.In January 2017 the Company entered into definitive agreement to acquire
51% equity stake in Creative Port Development Private Limited (`CPDPL') for the
development of Subarnarekha Port at Odisha through a wholly-owned subsidiary
Subarnarekha Port Private Limited. On September 18 2018 the Company completed
the acquisition of 51% equity stake in CPDPL a proposed greenfield port project. On
September 22 2018 the Company as a part of its strategy to grow in long products
executed definitive agreements for acquisition of steel business of Usha Martin
Limited (`UML') a special steel and wire rope manufacturer through a slump sale on
a going concern basis. On October 24 2018 the Company extended support for Tata
Sponge Iron Ltd's entry into steel business and identified it as the strategic vehicle
for acquisition of steel business of UML. On April 9 2019 TSIL completed the
acquisition of steel business undertaking including captive power plants for a cash
consideration of Rs 4094 crore which is subject to further hold backs of Rs 640 crore
pending transfer of some of the assets including mines and certain land parcels.In
March 2019 the Company acquired 250000000 12.5% Non-Convertible Redeemable
Preference Shares of face value Rs 10 each of TRF Limited on private placement
basis aggregating to Rs 250 crore.In March 2019 the Company acquired 2797000
equity shares of face value Rs 10 each of Tata Metaliks Limited at a price of Rs 642
per equity share aggregating to Rs 179.57 crore and 3492500 Warrants of face value
Rs 10 each at a price of Rs 642 per Warrant with a right exercisable by the Company
to subscribe for one equity share per Warrant of face value of Rs 10 each
aggregating to Rs 224.22 crore (25% paid on application).The company have 220
subsidiaries and 50 associate companies (including 28 joint ventures) as on March
31 2020.During the FY2020 the Board of Directors of the Company at its meeting
held on April 25 2019 approved the amalgamation of Bamnipal Steel Limited and
Tata Steel BSL Limited into and with the Company by way of a composite scheme of
amalgamation.During the year 2019-20 the Company and thyssenkrupp AG decided
not to pursue the proposed transaction to form a joint venture to combine their steel
businesses in Europe. The decision was taken after careful evaluation of the viability
of the proposal in light of the feedback received from the European Commission
('EC'). Thereafter on June 11 2019 EC formally announced its decision to prohibit the
proposed joint venture.During the year under review Tata Steel BSL Limited
(`TSBSL') an indirect subsidiary of the Company completed the acquisition of
controlling stake in Bhushan Energy Limited (now Angul Energy Limited) (`BEL')
pursuant to the Resolution Plan as approved by the National Company Law Tribunal
(Principal Bench New Delhi) vide its Order dated May 30 2019 under Corporate
Insolvency and Resolution Process of the Insolvency and Bankruptcy Code 2016.
Consequently BEL became a subsidiary of TSBSL effective June 1 2019. Pursuant to
the Rights Issue of Tata Steel Long Products Limited (formerly Tata Sponge Iron
Limited) ('TSLP') on July 24 2019 the Company acquired 25843967 Equity Shares of
face value of Rs 10 each of TSLP at a price of Rs 500 per equity share (including a
premium of Rs 490 per equity share) aggregating to Rs 1292.20 crore. As a result of
this the Company's holding in TSLP increased from 54.50% to 75.91%. The name
change of TSLP from Tata Sponge Iron Limited to Tata Steel Long Products Limited
is effective August 20 2019.During the year 2019-20 T S Global Holdings Pte. Ltd.
(`TSGH') an indirect wholly-owned subsidiary of the Company for want of regulatory
approvals decided not to pursue the proposed transaction with HBIS Group Co. Ltd.
(`HBIS') to divest its entire equity stake in NSH (100%) and TSTH (67.9%) to a
company in which 70% equity stake would be held by an entity controlled by HBIS
and the balance 30% by TSGH. During the FY2020 the Company on a consolidated
basis spent Rs 10398 crore on capital projects(CAPEX) across India Europe and
Canada largely towards on-going projects in India (Kalinganagar plant and Tata
Steel BSL Limited) essential sustenance and replacement schemes.Tata Steel won
the World's Most Ethical Companies award in 2020 an award instituted by Ethisphere
Institute for the 9th time. The Government of India had imposed a stringent
nationwide lockdown with effect from March 25 2020 which has severely impacted
manufacturing activities. Though the Steel and Mining sectors were exempt from the
lockdown measures they were subject to certain guidelines. Steel demand was
affected as key steel consuming sectors struggled to operate amidst weakening
economic activities working capital constraints shortage of manpower and logistical
issues. Pursuant to the conversion of Warrants issued on preferential basis by Tata
Metaliks Limited (`TML') at a price of Rs 642/- per Warrant on September 25 2020
the Company acquired 3492500 equity shares of Rs 10/- each of TML by exercising
its right to subscribe to one equity share per warrant of face value of Rs 10/- each
aggregating to Rs 224.22 crore (25% was paid on application). As a result of this the
Company's holding in TML increased from 55.06% to 60.03%.The Company had
previously announced that it is embarking on a comprehensive strategic organisation
level restructuring to conslidate its diversified business portfolio of Tata Steel Group
(`TSG') companies.The strategic objective is to group the TSG companies under four
distinct clusters viz. (a) Long Products (b) Downstream (c) Mining and (d) Utilities
and Infrastructure Services each controlled through a subsidiary company. In line
with the this objective the Company during the year 2020-21 transferred its holding
in (a) Tata Steel Special Economic Zone Limited (b) The Tata Pigments Limited (c)
Jamipol Limited and (d) Nicco Jubilee Park Limited to Tata Steel Utilities and
Infrastructure Services Limited (Company's wholly-owned subsidiary) and its holding
in (a) Jamshedpur Continuous Annealing and Processing Company Private Limited
and (b) Tata Bluescope Steel Private Limited to Tata Steel Downstream Products
Limited (Company's whollyowned subsidiary).The Company has 209 subsidiaries and
49 associate companies (including 28 joint ventures) as on March 31 2021.During
the FY2021 the Company on a consolidated basis spent Rs 6979 crore on capital
projects (CAPEX) across India Europe and Canada largely towards essential
sustenance and replacement schemes.Tata Steel won the World's Most Ethical
Company award in 2021 by the Ethispherer Institute for the tenth time. The
company also won the Best Company to Work For Award-2020 given by Business
Today. The company also bagged the Excellence in Waste Management Award at
the Confederation of Indian Industry 3R Awards 2020.The downturn in steel demand
due to the COVID-19 pandemic is expected to adversely impact the future business
outlook of Tata Steel UK Limited (TSUK) a subsidiary of the Company held through
Tata Steel Europe Limited (TSE) with respect to its ability to continue as a going
concern and meet its liquidity requirements. The Board of Directors has
recommended a dividend of Rs 25/- per fully paid-up Ordinary Share of Rs 10/- each
for the financial year 2020-21.