Australian mining and materials company Arrium will sell its 50.3% interest in New Zealand-based steel and allied products company Steel & Tube Holdings for NZ$91.2 ($75m).

The company has appointed the services of an investment bank to underwrite the sale of its shares in the steel company at a cost of NZ$2.05 ($1.68) a share.

With the sale, the company seeks to cut A$2.14bn ($2.18bn) in debt and all existing shares will be sold to several investors, including both institutional and retailers.

The sale allows Arrium to defend itself against a takeover bid from several companies including Noble, Posco and Steelmakers Australia, reports Reuters.

The companies have urged Arrium directors to hold talks to work towards an agreeable offer.

Arrium managing director and CEO Geoff Plummer said that the announced sale is a "strategic step" towards the ongoing review of the company’s steel and product portfolio.

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"The A$73.4 million gross proceeds from today’s announced sale builds on approximately $120 million received to date from business and asset sales under the review, and we are continuing to progress further opportunities mainly related to our non-integrated steel business.

"The sale of our shareholding reflects our strategy to focus on growing our mining and mining consumables businesses," added Plummer.

Arrium has projected an increase in its annual iron ore capacity to 11 million tonnes from the present 6 million tonnes by June 2013.