Mittal brothers cross swords

For the first time, the Mittal brothers 8212; London-based LN Mittal and Mumbai-based Pramod Mittal of the Ispat Group 8212; are fighting ...

For the first time, the Mittal brothers 8212; London-based LN Mittal and Mumbai-based Pramod Mittal of the Ispat Group 8212; are fighting a takeover battle. Their target 8212; a Bosnian steel company.

The Ispat Group and Anglo-Dutch steel producer LNM Group are the only bidders for a majority stake in BH Steel, a joint venture between the government of Bosnia8217;s Muslim-Croat Federation and the Kuwaiti Investment Agency KIA.

Reports say Ispat Group has offered a 310 million package for a 51 per cent stake in the steel mill, the sale of which is expected to be completed next week at the latest, an Ispat adviser said on Wednesday.

Till date, the LNM group headed by the elder Lakshmi Mittal had been focusing on buying steel firms across the world, barring India. The younger brothers, led by Pramod Mittal, had been concentrating on its six manufacturing facilities in India.

The Bosnian government has said it would decide on the best bidder this or next week, following consultations with its Kuwaiti partner.

Dusko Suvajac from Price WaterhouseCoopers, which is advising Ispat on the deal, said the firm has offered 115 million for a 51 per cent stake and at least 155 million to modernise the plant over the next eight years. It also offered a 30 million programme to solve ecological problems in Zenica, the town in central Bosnia where BH Steel is based.

8216;8216;The third component is a social programme for the employees,8217;8217; Suvajac said, explaining that Ispat planned to keep all of the current 2,700 workers and employ 500 more if it became a majority owner.

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BH Steel was established from the ruins of the socialist-era giant Zeljezara Zenica, which was devastated by the 1992-95 war. It produced 1.8 million tonnes of steel annually before the conflict and only about 100,000 tonnes a year afterwards.

Last November, Ispat Group acquired a majority stake in the northern Lukavac coking plant for about 48 million. It said it had already invested eight million Bosnian marka in the plant.

Last month, the LNM Group acquired a majority stake in Bosnia8217;s northern Ljubija iron ore mines for 25 million Bosnian marka. It has agreed to invest a further 26 million marka over the next three years.