After months of speculation, steel major Tata Steel on Thursday said it had sold off its entire 26.27% stake in Australian mining firm Riversdale, facing a takeover from giant Rio Tinto, for Australian $1.06 billion (approximately Rs4,940 crore).
It is a rich exit, as the Tatas have doubled their investment in a four-year period.
Rio Tinto, which had made an open offer to the shareholders of Riversdale in March that had been repeatedly extended to a final deadline that now closes on Friday, sees its shareholding go up from 73.20% to almost 99.7%.
The British-Australian group had said it planned to delist Riversdale from the Australian bourses and Tata Steel, which had for long maintained that it wanted to remain invested in the company, said on Thursday that it finally decided to sell the stake in the absence of a pact with Rio.
“Tata Steel has decided it would not want to hold its equity investment in Riversdale Mining Ltd which is proposed to be delisted, without any joint venture agreement with the majority shareholder in unlisted Riversdale Mining Ltd,” Tata said in a statement to the Bombay Stock Exchange.
“The sale represents around 100% appreciation of value in less than 4 years since its first investment,” it said.