Yet to hear from Stemcor on our EoI: Tata Steel

Cash crunch has forced Stemcor to offload some of its physical assets, including the ones in India

Tata Steel, which has evinced interest in acquiring Stemcor India's assets, is yet to receive any communication from the British parent of the iron ore producer and pellet maker.

"Expression of interest (EoI) is nothing beyond...Like a confidentiality and getting details. So if you take EoI from that perspective, yes we have given that but there is no detail that has come to us which gives us any sense of commitment or a comfort. We have not got any details of that asset," Tata Steel's group CFO Koushik Chatterjee has said in an investor call.

Stemcor asset is next door to Tata Steel's upcoming mill in Odisha's Kalinganagar, he said, but added that his firm has not yet done any valuation due to lack of information.

"If we get details, we will evaluate and take a suitable view on it," he said.

Continuous slump in global steel demand has taken toll on Stemcor as it is in rescue talks with banks after defaulting on more than $1 billion of loans. The cash crunch has forced the company to offload some of its physical assets, including the ones in India, which have an estimated enterprise value of $800 million.

The company, which has to present a full debt restructuring plan by month-end, is said to be going the auction way to find the buyer of its India assets, which includes a producing iron ore mine and a pellet plant.

Besides Tata Steel, almost all Indian steel makers, including JSW Steel, JSPL, Essar Steel, Electrosteel Castings and Adhunik Metaliks, have evinced interest in buying out Stemcor's India assets.

Adani group, Aditya Birla Group's Essel Mining and Anil Agarwal's Vedanta are also in the race along with Brazilian miner Vale. Company's employees have also decided to bid for the assets.

In India, Stemcor has a majority stake in Aryan Mining and Trading Corporation (AMTC), which has 100 million tonnes of iron ore reserves with the licence to mine 3 million tonnes per annum. It also has a 10 per cent stake in Mideast Integrated Steel (MISL) in Odisha. MISL has an iron ore mine with a current output of four million tonnes per year.

The company has a subsidiary, Brahmani River Pellets Ltd (BRPL), which has a four million tonne per annum beneficiation plant at Barbil, Odisha, and a pellet plant complex at Jajpur, connected by a 220 km underground slurry pipeline. Goldman Sachs is advising the British steel trading major for the asset sale.