Usha Martin's extraordinary general body has given the nod fo the management for selling its Jamshedpur steel plant and related assets to Tata Steel. The image is only for illustrative purposes.

Shareholders of Usha Martin, one of the world's top wire rope and speciality steelmakers, have given their nod for selling the company's steel business to steel major Tata Steel amid growing concerns of a market slowdown.

About 99.9 percent of shareholders of the company voted in the affirmative on a special resolution at an extraordinary general meeting, approving the sale, the Usha Martin management informed the stock exchanges in a regulatory filing on Saturday. The legal requirement to carry the resolution was 75 percent.

"The resolution proposed hereinabove has been passed with the requisite majority," the filing said.

Tata Steel earlier said it had signed agreements for the acquisition of Usha Martin's steel business for about Rs4,700 crore through a slump sale on a going concern basis.

Usha Martin plans to achieve debt consolidation by offloading its loss-making steel business.

Usha Martin's steel business includes the 1 million tonnes per annum (mtpa) specialised alloy-based manufacturing facility for long products in Jamshedpur, a productive iron-ore mine in Ghatkuri block, a coal mine under development straddling the Brinda and Sisai districts, and captive power plants located in Jharkhand, Tata Steel had said. It said Usha Martin is one of the world's largest wire rope manufacturers and a leading speciality steel producer in India.

The deal is expected to be completed over the next "few months," The Hindu Business Line said quoting Rohit Nanda, Usha Martin's CFO.

"Ideally, the sale should happen within the next two-four months. There are some approvals that are required from various government departments," he said.

About 51 percent stocks of Usha Martin are held by the promoter Jhawar group – primarily Basant Kumar, his son Prashant, and nephew Rajeev –while financial institutions and retail investors have the remaining shares.

There are reports that the company management led by Rajeev has got the support of the opposing camp of Prashant and his father for the steel unit sale to Tata Steel.

The sale proceeds will be kept in an escrow account and will be used for debt reduction, the company management reportedly told the shareholders. The long-term and working capital debts of Usha Martin are estimated at Rs4,700 crore.

It is believed that the company plans to focus on the expansion of its core business of wire ropes, which has been stagnating for a while on capital constraints and debt burden.

Usha Martin's shares closed on Monday on BSE at Rs42.70, up Rs1.15 or 2.77 percent, from the previous close. Ever since news of the imminent deal began circulating the stock has been recovering from a one-year low of Rs18.30 touched on March 28, 2018. It rallied sharply from Rs26.60 touched on October 29, 2018.

Tata Steel shares also rallied in the market on Monday, closing on Rs582.90 in BSE, up Rs9.60 or 1.67 percent. The counter had staged a steady recovery from the one-year low of 498.65 hit on July 19, 2018. The stock is trading far below the one-year high of Rs746.44 mark reached on January 15, 2018.