Tata Steel, JSW, Vedanta, Liberty Group of UK and Kalyani Steel are among firms that have shown initial interest in acquiring the steel-making facility of Usha Martin and bids are expected by month-end, managing director Rajeev Jhawar said.
"The process is on and five of them have signed non-disclosure pacts. Hopefully, by the end of this month, we would be expecting the bids. While (graphite maker) HEG had shown initial interest, they have not followed it up," Jhawar said on the sidelines of the annual general meeting of the company.
Debt-laden Usha Martin, a leading manufacturer of wire rope and specialty steel in the country, is planning to sell its 1-million-tonne-per-annum (mpta) steel plant at Jamshedpur in Jharkhand as one the measures to pay off around Rs 4,500 crore debt as of June-end this fiscal. The company has plants in the UK, Thailand, Dubai and Bangkok.
The steel business, with revenue of Rs 2,626 crore, comprised 54% of Rs 4,039 crore net sales for the company in the last financial year.
The debt is being serviced regularly, and this year, plans are there to pay off Rs 320 crore by March-end, chief finance officer Rohit Nanda said.
The due-diligence, including data-room visit, is going on, Jhawar said, adding that the current boom in the steel market has triggered interest among the prospective bidders.
The company earlier wanted to divest its wire rope business with a capacity of 2,59,320 tonne per annum but was forced to shelve the plan due to lack of interest from bidders. It instead decided to sell the steel plant as steel-making was becoming unsustainable following an expansion project.
Jhawar doesn't see problems for the wire rope business post the sale of the steel business as both the businesses can run independently of each other.
"Our steel plant at Jamshedpur not only supplies steel to our rope business in Ranchi but also to the outside market. And steel is available from other suppliers as well," he said.
Meanwhile, Jhawar is yet to settle the legal dispute with estranged co-promoter Prashant, even after expressing the willingness to settle a raging family dispute.
Rajeev is the nephew of Basant Jhawar whose son, London-based Prashant, who, at the behest of lender State Bank of India, was last year removed from the position of chairman. Following that, the father-son duo filed cases against Rajeev alleging unjust removal, mismanagement and siphoning of funds from the company.
Rajeev has denied all the charges and has expressed hope for a settlement.
"We are currently focusing on saving the company. Rest will all follow," Rajeev said when asked if there has been any progress in the settlement of the family dispute.
Prashant was replaced by G N Bajpai, former chairman of Securities and Exchange Board of India, who is also heading the committee to dispose of the steel facility.
HOT MEAL
- 1 mtpa – Capacity of Usha Martin's Jamshedpur plant that is on sale
- Rs 4,500 crore – Usha Martin's debt as of June 2018
- Rs 2,626 cr – Revenues of steel business
The due-diligence, including data-room visit, is going on, Jhawar said, adding that the current boom in the steel market has triggered interest among the prospective bidders
The steel business, with revenue of Rs 2,626 crore, comprised 54% of Rs 4,039 crore net sales for the company in the last financial year
The company earlier wanted to divest its wire rope business with a capacity of 2,59,320 tonne per annum but was forced to shelve the plan due to lack of interest from bidders
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The company earlier wanted to divest its wire rope business with a capacity of 2,59,320 tonne per annum but was forced to shelve the plan due to lack of interest from bidders. It instead decided to sell the steel plant as steel-making was becoming unsustainable following an expansion project.
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