December 15, 2005

Tata Steel to acquire Millennium Steel, Thailand

Tata Steel Limited announced today that it has signed definitive agreements with Cementhai Holding Company — a 100 per cent subsidiary of the Siam Cement Company, Thailand to acquire its shares and invest additional equity in Millennium Steel Company subject to certain conditions.

Under the terms of the agreement, Cementhai Holding Company, the largest shareholder of Millennium Steel with a 40 per cent equity stake (prior to the new shares subscribed to by Tata Steel) have committed to sell their shares into a voluntary tender offer that Tata Steel will make for all of the equity and preference shares of Millennium Steel subject to certain conditions precedent. The conditions precedent to the transaction include shareholder and creditor approvals for the issuance of new shares equivalent to 24.99 per cent stake in the expanded capital of Millennium Steel; amendment of the Articles of Association of Millennium Steel to enable 100 per cent foreign ownership in Millennium Steel; and regulatory approvals including the Board of Investment in Thailand.

The tender offer and the subscription to new shares by Tata Steel will be at Baht 1.15 per share.

Millennium Steel was formed through a merger of three operating companies — The Siam Iron and Steel (2001) Company, The Siam Construction Steel Company, and NTS Steel Group — in 2002 and is now the dominant steel producer in Thailand. The company is listed on the stock exchange of Thailand and is owned by Cementhai Holding Company, who hold 40 per cent, with the remaining being held widely among institutional and retail investors. The three operating units of the company have a cumulative capacity to produce 1.2 million tonnes of steel per annum through the electric arc furnace route and a long products rolling capacity of 1.7 million tonnes a year. For the year 2004, Millennium Steel had revenues of US$406 million and a profit after tax of US$29 million. For the 9 months ended 30 September 2005, the company's revenues and net profit was US$353 million and US$11 million respectively.

The investment is a significant progression in Tata Steel's globalisation initiatives and, together with the earlier acquisition of NatSteel's steel business, will significantly enhance its market position in South East Asia. The acquisition would have a strong fit with Tata Steel's strategic expansion plans, and there are likely to be significant synergy benefits in the future as a consequence of the transaction.

Standard Chartered Bank was the exclusive financial advisor to Tata Steel on the transaction. White and Case, Bangkok, and AZB and Partners, Mumbai were the legal advisors to the transaction, while Deloitte & Touche Bangkok were the accountants to the transaction.

Established in 1907 by its founder JN Tata, Tata Steel is the flagship of the Tata group, the most trusted corporate name in the country. It has one of the most modern steel making facilities and is also one of the lowest cost producers of steel in the world. It currently produces 5 million tonnes of steel per annum at its Jamshedpur plant and has recently invested in NatSteel Asia, which has a capacity of about 2 million tonnes per annum of finished steel. The steel company is focused on the sophisticated automobile and the construction sectors. A benchmark in corporate social responsibility and corporate governance, it believes in improving the quality of life of its employees and the communities it serves.

Millennium Steel Company is the largest steel company in Thailand with a capacity of 1.7 mtpa, producing long products for construction and engineering steel for auto industries. It has three operating facilities in Saraburi, Rayong and Chonburi province.


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