Reported By:
| Edited By: Shubhashish |Source: DNA |Updated: Mar 17, 2018, 03:44 AM IST
Ferro Alloys Corporation (Facor) is on the lookout for a strategic investor which could inject money into the company for its expansion and growth.
Going by official sources, the group has already invited bids through Ernst and Young (E&Y).
The Facor board is believed to have accepted the proposal to dilute promoter stake in the company for expansion of the power business.
The group plans to set up a power plant of 500 mw, which would require an investment of Rs 2,500 crore.
“We need to raise Rs 500 crore to fund our power business, and we are looking to raise this amount through a strategic stake sale,” Ashish Saraf, joint managing director said.
“We may consider selling stake in one of the three listed companies if we get the right valuation,” he said.
Saraf declined to name the companies interested in picking up the stake.
An official in the know, however, said E&Y had approached companies like Tata Steel, Vedanta Resources, JSW Steel and ArcelorMittal, amongst others.
Facor is looking to sell its stake at around Rs 40-45 per share against the market price of Rs 25.80 per share on the Bombay Stock Exchange on Wednesday.
At the current market price, the company has a market capitalisation of Rs 477 crore.
The stock gained 5% on the BSE on Wednesday on news of a possible investment by some strategic investor.
The other two listed companies of the group, Facor Alloys Ltd and Facor Steels Ltd, also closed up on the news. Facor Alloys gained 8.42% on the BSE to close at Rs 7.98 per share, while Facor Steels closed up by 3.77% at Rs 3.03 per share.
“Ferroalloys are widely used in the steelmaking process and that’s why this could be a sweet offer for the steelmakers,” said an analyst with a domestic brokerage, requesting anonymity as he wasn’t allowed to talk to the media.
Facor is one of the largest ferroalloys makers in the country and has a capacity to produce 65,000 tonne of ferrochrome per year and 2.5 lakh tonne of chrome ore per year at its flagship Orissa plant.
With NW18
