Mumbai March 29 (IANS) Tata Power on Thursday said its board has given approval for the sale of its defence business to Tata Advance Systems in a move that would also help to cut company debt.
The company said in a statement that the sale consideration approved for the defence business is Rs 2 230 crore.
"Tata Power today announced that its board has approved the sale of its defence business to Tata Advance Systems Ltd a wholly owned subsidiary of Tata Sons at an enterprise value of Rs 2 230 crore " it said.
Out of this Rs 1 040 crore is payable at the time of closing and Rs 1 190 crore is payable on achieving certain milestones.
"This is as part of the company s plan to monetise its non-core assets and improve the balance sheet " it added.
The deal is subject to government and other approvals including that of shareholders.
Commenting on the development Tata Power Chief Executive Anil Sardana said in a statement:
"Strategic Engineering Division (SED) is a non-core business division of Tata Power. The company has been charting its next phase of growth for which monetisation of non-core assets is a critical step. This sale will also help in reduction of leverage."
As the company s defence electronics unit the SED manufactures and assembles missile launchers electronic warfare equipment night vision devices and gun systems.
--IANS
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