Tata Steel on Friday said it has signed an agreement to acquire Odisha-based iron ore pellet manufacturer BRPL for Rs 900 crore in cash.
Brahmani River Pellets Ltd (BRPL), which had a turnover of Rs 452 crore in 2015-16, owns a 4 million tons per annum capacity pellet plant in Jajpur and a 4.7 million tons iron ore beneficiation plat in Bardil, Odisha. A 220-km slurry pipeline connects the pellet plant with the beneficiation plant. It manufacturers iron ore pellets for iron and steel industry.
“The acquisition provides an upstream integration opportunity to Tata Steel to meet its metallic requirements and improving the feed mix for its Kalinganagar steel plant and Jamshedpur steel plant,” the company said in a statement.
The deal, which is subject to regulatory approvals, is expected to close in four months. It also needs approval from RBI and other regulatory bodies to restructure BRPL’s balance sheet, including shareholders loan and advances.
“The acquisition of the company is being made at an enterprise value of Rs 900 crore plus closing adjustment,” it said.
BRPL was incorporated on August 24, 2006 and is engaged in the business of acquisition and beneficiation of iron ore and the manufacture and sale of iron ore pellets. Pellets are used as agglomerates in the iron making process.
The company was originally established by the Moorgate Industries Group, which continues to hold a significant stake in BRPL through its shareholding in AMTC.