In January, the company had signed an agreement with HIBS Group to divest 70 percent in the assets.
Just eight months after it signed a deal with China's HBIS Group to sell stake in its South-East Asian business, Tata Steel has been forced to call it off.
"The completion of transaction was subject to regulatory approvals. We have been informed by HBIS that they have not been able to procure the requisite approvals from the Hebei government, one of the key conditions precedent for the proposed transaction. Both parties have, therefore, decided not to extend the definitive agreements," Tata Steel said in a statement.
This is the second such deal that has gone awry for Tata Steel. Earlier this year, its proposed JV with thyssenkrupp was blocked by the European Commission.
Both the deals were important for Tata Steel to shed some of its debt of over Rs 1 lakh crore, and refocus its energies and capital into the Indian market.
According to agreement, TS Global Holdings (TSGH), a unit of Tata Steel, had signed a deal to sell 70 percent stake in the South-East Asian assets to Beijing-based HBIS Group.
The two assets are Singapore-based NatSteel Holdings Pte Ltd, and Tata Steel (Thailand). The deal included Tata Steel's operations in Vietnam and the assets were to be transferred into a company in which TSGH would have held 30 percent."Following the above, Tata Steel will immediately begin engagement with other investors in continuation of its strategy to find a partner for the South-East Asian business," the steelmaker said.Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months at 289. Use code FREEDOM.