Tata Power on Monday said it has completed the sale of its defence business to Tata Advanced Systems. Tata Advanced Systems is a wholly-owned subsidiary of Tata Sons.
"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," Tata Power said in a regulatory filing.
The company said it is expected to receive an enterprise value of Rs 1,076 crore as an upfront payment.
Balance consideration is subject to completion of achieving certain milestones specified in the agreements, the company added.
Tata Power said the sale of defence business is part of the company's ongoing strategic plan to monetise its non-core assets and reduce overall leverage.
"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," Praveer Sinha, CEO and Managing Director, Tata Power said.
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.