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| Dempo group to sell 40% stake in iron ore firm |
| Abhineet Kumar / Mumbai Aug 16, 2008, 05:59 IST |
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Sale to fund expansion plans after restructuring.
Goa-based Dempo Group is planning to divest 40 per cent in a company that will house its 100-million-tonne iron ore reserve. The group’s iron ore reserves are currently with the flagship V S Dempo & Co Pvt Ltd, and its two subsidiaries Dempo Mining Corporation and Sindhudurg Mining Corporation.
The group is planning a restructuring under which all the three mining companies will transfer its resources to a new company in which the stake will be sold. The restructuring is expected to help the group convert V S Dempo & Co, a pure play holding company for all group companies after its assets are hived off.
“We are already in talks with three to four private equity players,” said Shrinivas V Dempo, chairman, V S Dempo & Co. “We expect to finalise the deal by the end of December,” he added.
The company has appointed Mumbai-based investment bank Ambit as the advisor for the deal. The company did not specify how much it expects to raise from the stake sale. The group earned revenues of over Rs 1,000 crore from the iron ore mining and export business in 2007-08 and expects about Rs 1,300 crore in the current fiscal.
“We plan to use the money to expand the petroleum coke business and the other businesses,” Shrinivas Dempo explained.
Goa Carbon, a group company listed on Bombay Stock Exchange, is the second largest maker of calcined petroleum coke used in aluminium smelting. The group also plans to use the money to expand its iron ore business in countries like Australia and Indonesia.
“We are looking for 20-30 million tonnes of iron ore in Indonesia in a couple of months,” said Dempo.
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