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Tata Steel has formed a consortium with three other players to bid for the 79 per cent stake in the South Africa-based Highveld Steel.
"There are three other players in the consortium, which is looking at the possibility of acquiring Highveld," T Mukherjee, deputy managing director, Tata Steel, said, adding that the three companies are international players. He, however, refused to name them.
The Tata Steel-led consortium is conducting due diligence for Highveld. The Anglo American Group owns the 79 per cent stake in Highveld Steel.
In a parallel development, the company on Thursday said that it is exploring ways of raising long-term finance of up to $ 1 billion from the foreign markets.
The company's board formed a committee to examine various options for raising funds and to determine the appropriate form of the securities to be issued, provided the terms prevailing in the market are acceptable.
Kermas South Africa, part of the UK-based Kermas Group, which is Tata Steel's main contender, has also formed a consortium for the $ 1 billion stake.
According to industry analysts, a consortium would suit Tata Steel's interests better in Highveld Steel.
"Other than producing steel, the South African company is the largest vanadium producer in the world. But Tata Steel does not have an interest in vanadium. Other players in the consortium may be interested in acquiring Highveld's vanadium business," said a senior analyst tracking the industry.
Highveld is the second biggest steel firm in South Africa, behind Mittal Steel South Africa. Vanadium is used for making steel. Highveld also produces steel, vanadium products, ferroalloys, carbonaceous products and metal containers.
Highveld exports half of its products from its South Africa-based processing plants. Late last week, Mittal Steel South Africa gave strong hints of shelving its plan with the company's bid running into 'some procedural difficulties.'
Davinder Chugh, chief executive of Mittal Steel South Africa, the group's fully owned subsidiary, had said, "We had expressed our interest in buying Highveld, but there are perceived difficulties, which we are trying to deal with. We have so far not submitted any offer. The difficulties are in regard to perceptions about competition issues."
