Tata Steel on Wednesday said it will acquire 51 per cent stake of Creative Port Development Pvt (CPDPL)with a vision to optimise in-bound and out-bound supply chain for its steel plants.
"Tata Steel on Wednesday executed the share purchase agreement to acquire 51 per cent shares of CPDPL from CI Mega Projects Pvt Ltd," the steel firm said in a filing to BSE.
The agreement will be effective subject to fulfilment of certain conditions.
Tata Steel has also executed a shareholder agreement with CPDPL and its promoters for the development of Subarnarekha Port through SPV, Subarnarekha Port Pvt (SPPL), and the shareholders agreement will take effect on closing of the share purchase agreement, it said.
However, the company did not disclose the deal figure and added that the exact cost of acquisition will only be known at the completion of the project. The current outlay for the acquisition is approximately Rs 120 crore.
"The cost of acquisition will depend on the capital outlay of the project. The capital outlay is currently under investigation and will be firmed up only after studies are completed," it said.
Indicative time period for completion of the acquisition is approximately six months, the firm said.
The company further said the object of acquisition is "to derisk and optimise the in-bound and out-bound supply chain for the company's steel plant".
CPDPL in January 2008 had executed a concession agreement with the government of Odisha to develop the Subarnarekha Port. As of date, CPDPL has not started operations.
Incorporated in 2006, it is jointly promoted by Ramani Ramaswamy and Ramaswamy Rangarajan.