Usha Martin rubbishes concerns flagged by former chairmen

The board and management of Usha Martin has rubbished concerns flagged by its former chairmen and father-son duo Basant Prashant Jhawar on diversion of funds received from Tata Steel, terming them as "unfounded".

"The concerns highlighted by them regarding any diversion of funds received from Tata Steel towards purchase consideration for acquisition of steel business of Usha Martin are refuted. As such, the concerns are unfounded," the company said in a statement on Tuesday.

On Monday, the Jhawars expressed concern about the end-use of funds, which the company would receive by selling its steel business to Tata Steel, at a consideration between Rs 4,300 crore to Rs 4,700 crore.

The statement said the company's board had stipulated that the sale proceeds from the transactions would be first used towards discharging the liabilities to lenders.

"This will exhaust the sale proceeds. After that, Usha Martin will be fully deleveraged with only having its wire rope business," it said.

The statement added that the deal was a win-win situation for all the stakeholders.

"For employees of the divested business, they move to an employer who is known to be one of the most fair, credible and attractive. For the employees of the wire business, they would stay back with the company," it said.