FinMin invites bids for Ferro Scrap Nigam Ltd's privatisation

The sale would also involve transfer of management control in the PSU which is a 100 per cent subsidiary of state-owned MSTC

PSU, Privatisation — Illustration: Ajay Mohanty

2 min read Last Updated : Apr 01 2022 | 1:34 AM IST

The centre has sought bids to sell its 100 per cent stake in Ferro Scrap Nigam Ltd (FSNL) over five years after the cabinet approved privatisation of the public sector undertaking (PSU).

The sale would also involve transfer of management control in the PSU which is a 100 per cent subsidiary of state-owned MSTC. FSNL was incorporated in 1979, and is a specialised steel mill service provider engaged in scrap processing for steel mill companies in India. The Cabinet Committee on Economic Affairs (CCEA) had accorded in-principle approval to divest entire stake in FSNL held through MSTC in October 2016.

Expression of interest (EoI) from interested buyers will have to be submitted by May 05, and physical copies of the bids will have to be submitted by May 12. The bids would be opened, and shortlisted bidders would be intimated by May 25, according to preliminary information memorandum floated by Department of Investment and Public Asset Management (DIPAM).

Based on the evaluation of EoIs, shortlisted bidders will be provided with request for proposal (RFP), including draft share purchase agreement and access to the data room to review documents of the PSU to conduct due diligence. The shortlisted bidder, approved by the Cabinet Committee on Economic Affairs, will be designated the successful bidder.

The winning bidder will have to undertake certain obligations relating to certain matters including employee protection, business continuity, asset stripping, lock-in of the shares which would be specified at the RFP stage.

The company had a total manpower of 1,451 with 590 regular employees on the company’s payroll and 861 outsourced employees as on November 1, 2021. the companyt reported a profit after tax of Rs 22.75 crore in FY21 as against a PAT of Rs 30.58 crore in FY20.

The company’s authorized capital Rs 50 crores as on March 31, 2021, and paid-up share capital of Rs 32 crores. The entire paid-up capital is held by MSTC. The sale is expected to conclude in the next financial year.