Krupp, Nippon Steel Vie For Salem

International steel majors Krupp Thysson Nirosta (KTN), Evesta Sheffield and Nippon Steel and domestic stainless major Jindal Strips Ltd are among the steel majors in the race for acquiring a majority stake in Salem Steel Plant (SSP).

Yesterday was the last date for submission of `expression of interest' in Salem's proposed privatisation. Steel Authority of India Ltd (SAIL) proposes to divest up to 74 per cent to a strategic partner.

Alternatively, SAIL has given prospective bidders the option of participating in a downstream venture to be set up by SSP for a steel melt shop and a tieup for international marketing. The downstream venture is to be set up with 74 per cent private participation while the balance will be held by SSP.

J M Morgan Stanley, the advisor for the SSP privatisation, accepted the bid documents at both its Delhi and London offices.

According to sources, SSP's privatisation is expected to see a major tussle between steel multinationals who see this as their best opportunity to enter the domestic market with an established marketshare. Domestic stainless steel major Jindal Strips is also keen to acquire the company to consolidate its position.

SAIL is expected to announce the names of the shortlisted companies in three to four weeks, after its evaluation committee submits its recommendations.

According to sources, all the companies which submitted their bids yesterday opted to acquire 74 per cent equity in SSP.

However, they are understood to have indicated that they would also participate in setting up the downstream venture later.

SSP, India's second-largest stainless steel producer, can produce 1.86 lakh tonnes of hot-rolled steel and 70,000 tonnes of cold-rolled steel a year.

Spinning off SSP into a joint venture is part of the business restructuring plan approved for SAIL by the Union cabinet recently.

After the shortlisting is completed, SAIL will invite financial bids. Before that, the shortlisted companies will be given access to SSP's premises and records to enable them to work out their evaluation for the company.