ICVL not bidding for Riversdale

International Coal Ventures Ltd (ICVL), a grouping of five state-run companies — Steel Authority of India (SAIL), NTPC, Rashtriya Ispat Nigam Ltd, NMDC and Coal India Ltd, will not be bidding for Australia’s Riversdale Mining.

The board of ICVL, which met here today, took this “conscious and unanimous” decision of not placing a rival bid. Riversdale Mining has been offered a bid worth A$3.9 billion by Rio Tinto.

“We have discussed the due diligence report given by Citibank, but our board took a decision not to bid (for Africa-focused Riversdale Mining),” SAIL Chairman C S Verma, who heads ICVL, told reporters after the board meeting, without elaborating on the reasons for taking such a decision.

Verma said the board had extensively discussed the pricing scenario, future scenario, reserves available, various competing offers available and then arrived at this decision.

On January 24, Riversdale had said its board of directors, including Tata Steel nominee N K Misra, had recommended Rio Tinto’s A$ 3.9-billion takeover bid in the absence of a “superior proposal”.

“... all the directors of Riversdale recommended, in the absence of a superior proposal, that Riversdale shareholders accept the offer by Rio Tinto to purchase all Riversdale shares for 16 Australian dollar cash per share,” Riversdale had said in a statement.

Tata Steel, through its wholly-owned subsidiary TS Global Minerals Holdings, is the single largest shareholder of Riversdale.

Riversdale is being pursued by steel majors, as it has 13 billion tonnes of coking and non-coking coal resources in its Benga and Zambeze projects in Mozambique.

ICVL was formed in May 2009 with the objective of acquiring 500 million tonnes met coal reserves by 2019-2020.