JSW Steel emerges highest bidder for Bellary Steel: Sources

Sajjan Jindal-led JSW Steel is understood to have emerged as the highest bidder for acquiring the assets of Bellary Steel and Alloys, put on the block by a consortium of lenders led by IFCI.

Industry sources said that JSW has submitted Rs 210 crore bid against the reserve price of Rs 205.63 crore.

However, it could not be ascertained from JSW Steel as repeated calls to its officials went unanswered.

The sources said that Sesa Goa had also put in a valid bid at Rs 206 crore, slightly more than the reserve price. As per the bidding clause, the company was asked to take part in the inter-se bidding but it declined.

According to the tender document, inter-se bidding was to be conducted among the eligible bidders and highest bidder was to be declared successful.

When contacted, an IFCI official said that as per the rule the highest bidder would get the project, but refused to share the details.

Headquartered in Bangalore, Bellary Steel and Alloys (BSAL) was promoted by the S Madhav and S Parvathi, two business persons from the South, according to its website.

The company had embarked upon setting up an integrated steel plant, with 5 lakh tonnes per annum capacity and a provision of taking it to 2 million tonnes, at Bellary -- the place in Karnataka where JSW has its 7.8 mtpa plant.

However, BSAL, whose biggest asset is 700 acre freehold land, could not complete the project and ran into debt.

Thereafter, lenders consortium decided to go for sale of the assets of the company.

The sources said buying BSAL assets could prove to be strategically beneficiary for JSW, which expects to become largest domestic steel maker by March 2011 post acquisition of Ispat Industries.

Scrips of the JSW closed today at Rs 987.55 apiece on the Bombay Stock Exchange, down 4.37 per cent from previous close, while shares of BSAL were down by 2.74 per cent at Rs 3.19 per piece.