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| Orissa to hire advisor to restructure Idcol Ferrochrome, Kalinga Iron Works |
| BS Reporter / Kolkata/ Bhubaneswar Sep 28, 2010, 00:39 IST |
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Even as two Central PSUs- Steel Authority of India Limited (SAIL) and National Aluminium Company (Nalco) have evinced interest in picking up stakes in two firms run by Industrial Development Corporation of Orissa Ltd (Idcol)- Idcol Ferrochrome and Alloys Ltd (IFAL) and Idcol Kalinga Iron Works Ltd (IKIWL), the Orissa government has decided to appoint a transaction advisor for restructuring of these two firms.
The transaction advisor would also manage the process of disinvestment of the IFAL and IKIWL.
While the modernization of IFAL needs Rs 250 crore, the same for IKWL is pegged at Rs 2500 crore.
It has also been decided to go for revaluation of the assets of Kalinga Weavers' Cooperative Spinning Mills- Dhenkanal and Orissa Cooperative Spinning Mills-Bargarh.
These decisions were taken at the meeting of the Cabinet Committee on Disinvestment (CCD) chaired by state Chief Minister Naveen Patnaik.
The decisions come close on the heels of the meeting of the Public and Cooperative Enterprises Restructuring Committee (PCERC) on September 23, 2010 under the chairman of the state Chief Secretary B K Pattnaik.
At this meeting, it was decided that Idcol would continue to negotiate with the Central PSUs for the disinvestment of IFA and IKWL. The CCD may take a view on the issue of transfer of mines in favour of IFAL and IKIWL. Alternatively, the prospective bidders may enter into a long-term agreement for supply of iron ore with Idcol for secured supply of the raw material.
Meanwhile, the CCD has decided to appoint a valuator for revaluation of the assets of the two spinning mills- Kalinga Weavers' Cooperative Spinning Mills (Kalicospin)- Dhenkanal and Orissa Cooperative Spinning Mills (Oricospin)-Bargarh. The bidding process will be done afresh for the sale of assets of these two mills.
The department of public enterprises of the state government had advertised for the sale of assets of Kalicospin on November 30, 2007. Six bidders had submitted their bids and commercial bids of four shortlisted parties were opened on February 8, 2008.
After due procedure on January 15, 2009, the CCD had approved the offer of Oriental Agency, the highest bidder and had decided to sell the assets of Kalicospin to Oriental Agency at a consideration of Rs 6.16 crore as one-time payment. Subsequently, Oriental Agency backed out and the CCD on August 11, 2009 approved the sale in favour of the second highest bidder- Hindustan Pulverising Mills with a condition to raise the price quote from Rs 5.74 crore to Rs 6.16 crore. However, Hindustan Pulverising Mills did not agree to the proposal.
The bid of the third highest bidder- Ruhatiya Spinners Ltd was not considered due to a legal notice for refund of Earnest Money Deposit (EMD).
The fourth highest bidder- Rajshree Vanijya Pvt Ltd had agreed to pay Rs 6.16 crore for the assets of Kalicospin.
The PCERC on August 6 this year had found that the tenders submitted by the bidders for the assets of Kalicospin were not acceptable. Keeping in view the value appreciation of land, it was decided to cancel the tender process held earlier and make fresh valuation of the mill.
In case of Oricospin, the CCD on January 29, 2006 had approved the sale of the assets and business of the mill in favour of Earth tech Enterprises Ltd (EEL)-New Delhi with a financial offer of Rs 5.04 crore. Due to legal challenges and attachment orders in different courts, the mill has not yet been transferred in favour of EEL.
The PCERC in its meeting, had decided to cancel the tendering process held earlier and make a fresh valuation of the mill. The EMD of Rs eight lakh submitted by EEL has already been refunded.
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