Due Diligence On Sail & #39;S Steel Unit In Salem To Kick Off In Nov

The due diligence at Steel Authority of India's (SAIL) stainless steel unit at Salem, which was put on hold for a year due to political uncertainty following assembly elections in Tamil Nadu, is finally expected to begin in November.

According to senior SAIL official, "Tata Steel-Usinor and Jindal-ALZ, the two combines shortlisted for the Salem Steel Plant, have signed the confidentiality agreement, following which they were sent the detailed information memorandum on the plant. The due diligence is expected to start in November."

In the meantime, SAIL is working towards creating a conducive climate for the smooth divestment of Salem unit since the support of employees as well as political support is essential for any successful divestment, the official said.

Tata Steel is waiting for a green signal to go ahead with the due diligence, a senior Tata Steel executive said. If the Tata Steel-Usinor combine bags the deal, it will mark the Tatas' maiden foray into stainless steel business.

The Salem unit's divestment has been delayed by almost a year now. Previously, based on the recommendations of JM Morgan Stanley, Tata Steel-Usinor combine, Jindal Strips and Avesta Sheffield were shortlisted in the proposed divestment programme.

Eventually, Avesta Sheffield was out of the race and the Jindals joined hands with ALZ of Belgium.