Russian Firm Willing To Pick Up 49% In Iisco Equity

Russian trading firm Tyazh-promexport (TPE), which is keen to partner the Steel Authority of India (SAIL) in the revival of Indian Iron and Steel company (IISCO), is willing to pick up up to 49 per cent stake in the ailing company.

The government is yet to decide on the proposal. In a global tender floated last year, SAIL had invited bids according to a revival package for the Burnpur-based unit prescribed by the Board for Industrial and Financial Reconst-ruction (BIFR).

IISCO is a wholly owned subsidiary of the Steel Authority of India.

Tyazhpromexport subsequently emerged as the only bidder and agreed to pick up 37 per cent stake being offered to the private partner in the equity of the steel unit.

 

The BIFR had directed the Steel Authority of India to find a partner from the private sector who would be willing to invest funds in the modernisation of the unit.

While SAIL would retain 51 per cent, the private partner will have to pick up 37 per cent of the equity while the government of West Bengal and the employees of the plant are expected to pick up 6 per cent each.

However, the revival package for Indian Iron & Steel hinges on the decision of the finance ministry whether to allow Tyazhpromexport to route part of its proposed investment in the ailing steel unit through the rupee-rouble escrow account.

SAIL has sought further extension of the deadline which ended on February 26.

Tyazhpromexport has suggested that it be allowed to route at least 10 per cent of the funds through the rupee-rouble account.

The remaining funds would be invested through the supply of machinery.