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Journalism of Courage
The countrys biggest steel producer SAIL has joined the race in acquiring British firm Stemcors India assets and has commenced negotiations with the company.
Around a dozen overseas and domestic companies including Ruias-promoted Essar,Tata Steel and JSPL are in the fray for acquiring the UK-based companys assets in the country.
The companys subsidiary Aryan Mining and Trading Corporation has a 100 MT iron ore mine. It also has certain stake in a steel firm in Odisha which has an iron ore mine with a 4 MT per annum output. The company has a subsidiary,Brahmani River Pellets,which has a 4 MT per year beneficiation plant at Barbil,Odisha,and a pellet plant complex at Jajpur,connected by a 220 km underground slurry pipeline. Its assets understandably have an enterprise valuation of close to $ 850 million.
So far companies like JSPL and Essar have been vying for acquiring Stemcors assets and are said to have concluded several rounds of pre-acquisition talks,but Stemcor is learnt to be awaiting for the right size of the proposed deal.
Now,SAIL has joined the fray and has intensified talks. Company officials have concluded at least two rounds of meetings and more are slated in coming weeks, a top steel ministry official told The Indian Express. However,when contacted SAIL Chairman CS Verma denied any acquisition talks with Stemcor.
The key reason why SAIL is interested is because Stemcors beneficiation plant is located in Barbil,which is in proximity to the SAILs existing plant at Rourkela,while its iron ore mine in close proximity would help in backward integration for its operations. SAIL is also looking to expand its footprint in Orissa due to its abundant iron ore and coal reserves.
