08/08/14 – SAIL in talks with IDCOL for buying two subsidiaries
NEW DELHI: Steel maker SAIL is in advanced stages of negotiation with Industrial Development Corporation of Odisha for acquiring 100 per cent and 50 per cent stake in its pig iron and chrome making subsidiaries respectively.
Sources said following detailed due-diligence of assets, there has been a series of discussions between the two parties. A financial bid has also been made by the country’s largest steel maker, Steel Authority of India (SAIL)BSE -4.07 %, they added.
Eyeing to acquire or even enter into joint venture pacts with IDCOL for the two units, SAIL was exploring these possibilities and signed a Memorandum of Understanding with the Odisha government firm.
Following the MoU, SAIL had undertook valuation of assets and prepared an investment plan aimed at better utilisation of land and resources of both the subsidiaries – IDCOL Ferro Chrome Alloys (IFCAL) and IDCOL Kalinga Iron Works (IKIWL).
IFCAL was established in 1969 at Jajpur Road on 369 acres of land with technological assistance of a Swedish firm. The company has 18,000 tonnes of ferro chrome making capacity and a 9.5 MW captive power plant.
It sources chromite from an IDCOL mine at Tailangi, which is around 60 KM away from the plant, having an estimated 63.40 lakh tonnes of reserve. Ferro chrome is used in steel making, particularly in the making of stainless steel.
IKIWL produces 1.66 lakh tonnes of foundry-grade pig iron and 24,000 tonnes of cast iron spun pipes in a year. The pig iron division was started in 1963 while the cast iron division was installed in 1985. It has captive mines for both iron and manganese ore. Pig irons are used in the foundries for cast iron production.
Facilities for manufacturing of DI pipe and a coke oven plant can also be set up within the plant premises which are located on 570 acre area.
Source – TheEconomicTimes.com