Acquisition of Millennium Steel, Thailand

December 22, 2005Mumbai

22

Tata Steel Strategy

Thai Economy

Brief profile of Millennium Steel

Transaction structure and values

Areas of value unlock and integration

Timelines

Agenda

33

Build stronger base in India

De-integrated dispersal of facilities in select geographies

Ownership and development of raw material sources

Access to captive ports and other dedicated logistics facilities

Size of 20 - 25 mtpa by 2015

‘More from Steel’ via branding and value added products

Pursue strategic acquisitions

Tata Steel strategy

44

Tata Steel Strategy

Thai Economy

Brief profile of Millennium Steel

Transaction structure and values

Areas of value unlock and integration

Timelines

Agenda

55

Thai Economy

GDP expected to grow @ 5.4% in 2006 (from 4.6% in 2005). Thai economy affected by

various shocks in 2005, including Tsunami, a severe draught and surge in fuel prices

Per Capita GDP (2004 USD PPP) of Thai economy : US$ 8,020

Sovereign Credit Rating of Thai Economy : Baa1 (by Moody’s) and BBB+ (by Standard &

Poor’s)

Nominal GDP : US$ 161.5

bn

Source : UBS

66

Thailand Market

Market characteristics

Average capacity utilisation in Steel Industry is ~ 58% in Thailand

The infrastructure plan laid out by the Government is the key to the future

demand growth

Flats70%

Longs30%

Source : IISI

77

Thailand Long Products Market Outlook

The Thai long products market is expected to grow at a rate of 6%-8% over

the next five years

Two drivers of growth for the long products:

Spending on infrastructure by the government: will be a significant source for

growth in demand for rebars and construction grade wire rods

Growth of the auto industry: this is expected to boost the demand for higher and

specialty grades of long products

The Thai market is poised to change in terms of quality mix

Government slated to prescribe stringent norms for construction steel

Demand for specialty grades increasing on the back of growth of sophisticated

user industries like auto and engineering

88

Thailand Infrastructure Spending Programme

Almost half of the spending will be in the mass-transit and transportation

segments, which have a direct impact on the outlook for longs market

Implementation of these projects will imply that public spending will take

over from consumption and export sectors as the engine for growth

Infrastructure spending

1,614

6,145

10,31311,711 11,205

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2005 2006 2007 2008 2009

US

D m

n

99Source : Ministry of Finance, Thailand

Million Baht 2005 2006 2007 2008 2009 2005-09

1. Mass Transit 1 47 98 144 134 423

2. Transportation Projects 35 48 81 80 84 329

3. Housing Projects 15 54 64 57 23 214

4. Water Circulating System

Projects

- 38 54 54 54 200

5. Academic Facilities

Projects

0 14 27 27 27 96

6. Hospital Facilities Projects 2 12 29 27 26 96

7. Others 15 42 73 96 116 342

Total 67 255 428 486 465 1,701

Mass Transit & Infrastructure …Government Projects Mass Transit & Infrastructure …Government Projects 2005 - 20092005 - 2009

1010

Tata Steel Strategy

Thai Economy

Brief profile of Millennium Steel

Transaction structure and values

Areas of value unlock and integration

Timelines

Agenda

1111

Millennium Steel : Overview

Millennium Steel (MS) is the largest steel

producer in Thailand

Accounts for 36% of steel melting and

24% of rolling capacity in Thailand

Manufactures long products for use

in the construction industry

MS is a holding company and operates

through three operating companies

Was formed in 2002 through a merger

of NTS Steel with the two steel units

of the Cementhai Group

The merger was encouraged by the

Thai government and the lenders to

improve the health of the companies

after the Asian crisis

Millennium Steel Shareholding Pattern

Millennium Steel Group Structure

Millennium Steel

NTS Steel GroupThe Siam Iron and

Steel (2001) Co.

The Siam Construction

Steel Co.

99.52% 99.95% 99.99%

Cementhai

Holding40%

Institutions

23%

Public and

Others37%

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Millennium Steel, Thailand : Location and Facilities

The company has facilities for steelmaking with a total capacity of 1.2 mtpa

The company produces steel through scrap-fed electric arc furnace route

The company produces rebars, wire rods and small sections for the construction industries

Unit-wise Rolling Capacity, tpa

Source: Company information

NTS Steel GroupSriracha, Chonburi Province

The Siam Iron and Steel Co.Ban Mor, Saraburi Province

The Siam Construction Steel Co.Ampher Muang, Rayong

Location Steelmaking Rebar Wire Rods Small Sections Total

SISCO Saraburi 200,000 - 230,000 170,000 400,000

SCSC Rayong 500,000 500,000 - - 500,000

NTS Chonburi 500,000 400,000 400,000 - 800,000

Total 1,200,000 900,000 630,000 170,000 1,700,000

Rolling

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Consolidated Financial Performance

US$ million Jan-Dec 2003 Jan-Dec 2004 Jan- Sept 2005Net Sales 249.0 419.0 352.9 EBITDA 40.7 73.7 34.8 EBITDA Margin 16% 18% 10%Net Income (1.3) 30.2 10.9 Net Income Margin -1% 7% 3%

US$ millionAs on

31st Dec'03As on

31st Dec'04As on

30th Sept'05Shareholders Equity      Common shares 98.2 115.6 112.3 Preferred shares 39.5 39.9 38.3 Warrants 3.2 3.3 3.2 Convertible Debentures 19.5 5.0 4.9

Reserves 58.4 99.7 106.8 Sub-total 218.8 263.5 265.5  Minority Interest 0.2  0.2  0.2 Total shareholders Equity 219.0 263.7 265.7Net Debts 260.2 247.0 236.0Exchange Rate: THB/US$ 40.51 39.71 41.00

1414

Tata Steel Strategy

Thai Economy

Brief profile of Millennium Steel

Transaction structure and values

Areas of value unlock and integration

Timelines

Agenda

1515

The investment in Millennium Steel is a significant progression in Tata

Steel's globalisation initiatives and, together with the earlier acquisition of

NatSteel’s steel business, will significantly enhance its market position in

South East Asia

The acquisition will have a strong fit with Tata Steel’s strategic expansion

plans and there are likely to be significant synergy benefits in the future as

a consequence of the transaction

Will enable Tata Steel to focus on its de-integration production strategy

Transaction Rationale

1616

Terms of Definitive Agreements with CHC

Cementhai Holding Company (CHC), the largest shareholder of MS with a 40%

equity stake (prior to the new shares subscribed to by Tata Steel) have committed

to sell their shares into a voluntary tender offer that Tata Steel will make for all of

the equity and preference shares of MS subject to certain conditions precedent.

Conditions precedent to the transaction include

Shareholders and creditors approvals for the issuance of new shares

equivalent to 24.99% stake in the expanded capital of MS;

amendment of the Articles of Association of MS to enable 100% foreign

ownership in MS; and

regulatory approvals including the Board of Investment in Thailand.

The tender offer and the subscription to new shares by Tata Steel will be at Baht

1.15 per share.

1717

Evolution of Holding Structure

CHC Others

MS

Tata Steel

Others

MS

Tata Steel

Others

MS

Current

Stage 1:

Stage 2 - Final

CHC

41% 59% 24.99% 56% to

100%

44% to 0%

31% 44.01%

Preferential allotment of 24.99% of fresh equity of MS to Tata Steel

1818

Transaction Cash Distribution

No of shares to be acquired = 4716 mn to 8422 mn (56%) (100%) Total Cash : THB 5423 to 9685 mn (USD 131 to 233 mn)

Cash into MSNo of shares = 2105 mn

@1.15 THB/share Cash = THB 2420 mn

(USD 58 mn)

Cash to CHCNo of shares = 2611 mn @ 1.15 THB / share Cash = THB 3003 mn

(USD 72 mn)

OthersNo of shares = 0 to 3706 mn @ 1.15 THB / share Cash = THB 0 to 4262 mn (USD 0 to 103 mn)

2.Purchase of 31% Equity of CHC on expanded equity base of MS1.Preferential Allotment of

24.99% Equity

3.Purchase of balance 44% Equity of from the market

Total Cash outgo for 56% stake in expanded capital of MS, before open offer will be approximately US$ 130 million

1919

Tata Steel Strategy

Thai Economy

Brief profile of Millennium Steel

Transaction structure and values

Areas of value unlock and integration

Timelines

Agenda

2020

Areas of value unlocks and integration

MS has a dominant position in the market (~ 25% market share in long products)

Most of plant and equipment erected in 1990s

comparatively new and high quality plant & equipment

MS’ operating efficiency evident from their cost-competitiveness despite 60%

utilisation

The company owns brands which are well established and known in the Thai

market

The company has good quality assets with potential to improve

Change in product mix towards high margin products

Efficiency improvements at various production stages

Significant value can be created from synergies with Tata Steel through

billet supply

2121

Tata Steel Strategy

Thai Economy

Brief profile of Millennium Steel

Transaction structure and values

Areas of value unlock and integration

Timelines

Agenda

2222

Transaction Steps : Expected to get completed by 2nd quarter of 2006

To achieve Tata Steel’s objectives, the transaction is envisaged to be

sequenced as depicted here

Tata Steel signs an agreement with CHC pursuant to which CHC will tender their shares to Tata Steel in the voluntary tender offer;

CHC will also be obliged to vote in favour of changing the articles of MS to facilitate this transaction

Tata Steel will make an offer to the board of MS to make a voluntary tender offer to MS shareholders subject to:

(a) Being issued 24.99% new shares

(b) Articles of the company being changed

(c) Other approvals which may be required being obtained

MS Board to call for a general meeting of the shareholders of MS to consider the special resolutions for issue of new shares and change of articles ;

Similarly, resolutions for changing articles of the subsidiaries to be moved;

Application or change of BoI approvals to be made

On the basis of shareholders approval, if obtained, Tata Steel will be issued the new shares and Tata Steel will in turn make the voluntary tender offer

Step-1 Step-2 Step-3 Step-4

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