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To: Mohan Marette who wrote (10165)	12/21/1999 11:07:00 AM
From: Mohan Marette	Read Replies (1) \| Respond to of 12475

Tatas set to merge five engineering subsidiaries. tatasteel.com tata.com Arijit De (FE) Mumbai, Dec 20: The Tatas have finally set the ball rolling to merge all the five engineering subsidiaries of group flagship Tata Steel into TRF Ltd. The Tisgroup companies merger will bring down the number of Tisco's operating subsidiaries and associated companies to nine. The companies that are being merged with TRF in a five-way merger, under the engineering group, are Tata Construction & Projects, Stewart & Lloyds, Tata Technodyne and Tata Material Handling Systems. The other company in the engineering group, the ailing German joint venture Tata Korf, could also be merged at a later stage. The Tisgroup merger was originally proposed in the early 1990s, but the equity presence of several international majors in some of these companies - Tata Technodyne, for example, is a joint venture with Fluor Daniel - proved to be a major hindrance. Confirming the development, a Tata group source said: "The five companies have been operating very closely over the last couple of years, even though they were separatebusiness entities. Merging them is a logical step."Regulatory and legal clearances, however, is expected to take some time before the merger is through. The move is part of a bigger effort towards a wider restructuring of the steel and related operations of the Tata group, aimed at refocussing on core business of steel making. As a first step in the consolidation process, the subsidiaries and associate companies were clubbed into four broad groups - steel, allied, refractories and engineering groups. Besides operational synergies, the frail financial health of some of the Tisco subsidiaries has also necessitated the restructuring. Most of the engineering companies have been struggling in recent years owing to the ongoing recession in the manufacturing sector. While Stewarts & Lloyds recorded a net profit of Rs 1.08 crore in the last fiscal, Tata Technodyne's profit after tax was barely Rs 89 lakh. While Tata Construction & Projects is sick, Tata Material Handling Systems has accumulated losses. Whilethe Tatas have already divested their entire 40 per cent stake in Tata Timken in favour of the US-based company, Ipitata Refractories has been put on the block. Only company that will remain in the refractories group is Tata Refractories. The steel group comprises Tinplate Company of India, Tata SSL, Tata Yadogawa and Tata Ryerson, the equal joint venture with Ryerson Tull of the US for steel-servicing. The cold-rolling division of Tata SSL was last year transferred to Tata Steel. The "allied" consists of Tata Sponge Iron, Tata Pigments and Tata Metaliks. Tata Timken was initially kept under the allied group till the group decided to get out of tapered rolled bearings.