Tata Power Company Ltd. has announced that it has completed the sale of its defence business to Tata Advanced Systems Ltd., a wholly owned subsidiary of Tata Sons Pvt. Ltd.

The sale was completed as per a Scheme of Arrangement, which was approved by National Company Law Tribunal at Mumbai and Hyderabad. The company is expected to receive an enterprise value of ?1,076 crore as upfront payment (?1,040 crore as per agreements which were revised in line with closing adjustments).

Balance consideration is subject to completion of achieving certain milestones specified in the agreements.

The sale of defence business is part of the company’s ongoing strategic plan to monetize its non-core assets and reduce overall leverage, Tata Power said in a statement.

Praveer Sinha, CEO & MD, Tata Power said, “Sale of defence business is in line with our commitment to divest non-core assets & businesses.”

He said the proceeds of the sale will help the company to reduce the leverage and increase focus in core business areas like renewable generation, distribution and new service-led businesses which will bring greater value for our shareholders.

The Strategic Engineering Division (SED) of Tata Power was its non-core defence electronics division, engaged in business of indigenous design, development, production, integration, supply and life cycle support of mission critical defence systems.

It is into manufacturing and assembling of missile launchers, electronic warfare, night vision systems and gun systems.