Tata Steel sells 51 pct in refractory unit to Japan's Krosaki

Thu Apr 21, 2011 8:04am GMT

* Deal values refractory business at $255 million
* Tata to retain 26.5 pct in refractory unit
* Tata Steel shares up 1 pct in Mumbai trade

MUMBAI, April 21 (Reuters) - Tata Steel , the world's seventh-largest steelmaker, on Thursday agreed to sell 51 percent stake in a refractories business to Japan's Krosaki Harima Corp , valuing the unit at 11.30 billion rupees ($255 million).

Krosaki, an associate company of Japan's largest steelmaker Nippon Steel Corp , is a leading refractory player with global presence and access to advanced technology.

Tata Refractories is the largest company in its segment in India, and manufactures a range of dolomite, high alumina and silica refractories, which are used in linings for furnaces, kilns, incinerators and reactors.

It posted revenue of 9.1 billion rupees and operating profit of 1 billion rupees in fiscal year ended March 2010.

Tata Steel will hold 26.5 percent stake in the business.

Earlier this year, Nippon and Tata Steel said their $480 million cold-rolled sheet steel joint venture will begin production in India by late 2013, and agreed to discuss expanding co-operation. [ID:nTOE70607K]

At 1.13 p.m. (0743 GMT), shares in Tata Steel, valued by the market at $12.7 billion), were up 1 percent at 630.80 rupees in a firm Mumbai market . ($1 = 44.3 rupees) (Reporting by Prashant Mehra; Editing by Ranjit Gangadharan,sourced Thomson Reuters)