State-owned Steel Authority of India (SAIL) has made a global invitation for expression of interest for proposed strategic disinvestment of three of its special steel producing units.
The three units of SAIL are Visveswaraya Iron and Steel Plant in Bhadravati, Karnataka, Salem Steel Plant in Tamil Nadu, and Alloy Steel Plant in Durgapur, West Bengal.
Transaction advisor SBI Capital Markets Limited, via its preliminary information memorandum clarified that no debt taken for any of the units is proposed to be transferred to any of the divested units. For all the three entities, the debt has been raised by SAIL at the corporate level and the interest costs are allocated to the unit, it said.
A mail sent to SAIL remained unanswered till the time of going to press.
Of the three units, Visvesvaraya Iron and Steel produces alloy steel and pig iron, while Salem Steel makes high grade stainless steel. At full capacity, the three plants produce 1,400-1,500 tonne steel per day.
On financial performance, since the last five years between FY15-FY19, all the three units have been loss making.
In 2017, employees of the three units went on a day-long strike demanding the government give them one more year to show profitability.
The last date for invitation of queries through email or physical copy is scheduled July 18 with last date for submission of expression of interest physically on 1 August, 2019.
Intimation to the shortlisted bidders will take place on 8, August 2019, stated the memorandum.
Since the last few years, domestic steel industry has been in a consolidation phase with major acquisition taking place under Insolvency and Bankruptcy Code (IBC).
Large domestic primary steel producers such as JSW Steel and Tata Steel have been scouting for steel businesses in the country to increase its market share in a bid to be part of the steel production growth story where production target has been set at 300 million tonne by 2030.