Tata Power is expected to receive an enterprise value of Rs 1,076 crore as upfront payment (Rs 1,040 crore as per agreements, which were revised in line with closing adjustments).
Balance consideration is subject to completion of achieving certain milestones specified in the agreements.
“The sale proceeds will help 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,” said Praveer Sinha, CEO & Managing Director of Tata Power.
The sale of defence business is part of the company’s ongoing strategic plan to monetise its non-core assets and reduce overall leverage.
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.