New Delhi, Nov 2 (IANS): Tata Power has completed the sale of its defence business to Tata Advanced Systems Limited, a wholly-owned subsidiary of Tata Sons Pvt Ltd.
The sale process was completed on October 31, a company statement said on Monday.
The sale was completed as per a Scheme of Arrangement, which was approved by the National Company Law Tribunal at Mumbai and Hyderabad in December, 2019 and March, 2020 respectively.
The company is expected to receive Enterprise Value of Rs 1,076 crore as upfront payment (Rs 1,040 crore as per agreements which was revised in line with closing adjustments). Balance consideration is subject to completion of achieving certain milestones specified in the agreements.
The sale of defence business is part of the company's ongoing strategic plan to monetise its non-core assets and reduce overall leverage.
"Sale of defence business is in line with our commitment to divest non-core assets and businesses," said Praveer Sinha, CEO & Managing Director, Tata Power.
"The sale proceeds will help the company to reduce leverage and increase focus in the core business areas like renewable generation, distribution and new service-led businesses which will bring greater value for our shareholders".
The Strategic Engineering Division (SED) is a non-core defence electronics division of the company, engaged in business of indigenous design, development, production, integration, supply and life cycle support of mission critical defence systems. The key products include manufacturing and assembling missile launchers, electronic warfare, night vision systems and gun systems.
The division has been awarded programmes of national importance such as Missile Launchers: Pinaka MBRL / Akash Launchers for Army & Air Force (AAFL & AAL) / Strategic Missile Launcher / MR-SAM Launchers; Electronic Warfare ; (Modernisation of Airfield Infrastructure (MAFI).
The SED has three dedicated manufacturing units at Bangalore Electronic City, Vemagal in Karnataka (under construction) and a SEZ near Bengaluru (under construction).