Tata Power has completed the sale of its defense business to Tata Advance Systems.
In a filing with the exchange, Tata Power said, “The sale of defense business was completed as per a Scheme of Arrangement. Which was approved by the National Company Law Tribunal (NCLT) at Mumbai, and Hyderabad in December 2019 and March 2020, respectively.”
“It is expected to receive an enterprise value of Rs 1,076 crore as an upfront payment,” the filing said.
Adding to the filing, Tata Power said, “Balance Consideration is subject to completion of achieving certain milestones specified in the agreement. The sale of defense business is a part of the company’s ongoing strategic plan to monetize its non-core assets and reduce overall leverage.”
Speaking on the development, Praveer Sinha, CEO & Managing Director of Tata Power said, “The sale proceeds will help the company to reduce leverage and increase focus in the core business areas like renewable generation, distribution and new services led businesses, which will bring greater value for our shareholders.”
Strategic Engineering Division (SED) is a non-core defense electronic division of the company, engaged in the business of indigenous design, development, production, integration, supply & life cycle support of mission-critical defense systems.
The products include manufacturing and assembling missile launchers, electronic warfare, high vision systems, and gun systems.
SED has three dedicated manufacturing units in Bangalore – Electronic City, Vemagal in Karnataka (Under Construction), and SEZ near Bengaluru (Under Construction).
