EBG, a subsidiary of German steel giant Thyssen, will pick up 74 per cent in a new joint venture to be formed with Vijaypat Singhania group flagship Raymond Ltd.
The new joint venture will be formed by hiving off Raymonds steel business, based in Nashik, Maharashtra. While Raymond will hold a 26 per cent stake, EBG, will hold the rest.
EBG is Europes largest manufacturer of electrical steel. The total value of assets of Raymond Steel is $106.5 million or Rs 413 crore, besides current assets. The valuation of the plants current assets is being done by management consultant and audit firm KPMG Peat Marwick. If approved, this will rank along with JCT-Polysindo and India Cements-Raasi Cement as one of corporate Indias largest takeovers.
The Raymond board met yesterday to clear the proposed venture, though details will be finalised later.
The two sides are yet to finalise the composition of the board of the new company and the nature of the management of the new entity. Raymond began production of cold-rolled oriented (CRGO) and cold-rolled non-grain oriented (CRNO) silicon steel a couple of years back.
These steels are generally used in transformers and higher capacity generators and motors as well as in electric motors.
The first phase of the Raymond plant with a total capacity of one lakh tonne of CRCA per annum, was set up at a cost of Rs 260 crore.
The cold-rolling plant has a total installed capacity of 200,000 tonnes of cold-rolls coils annually. The total cost of the project is around Rs 450 crore.
The company had entered into a 10-year technical collaboration with Allegheny Ludlum Corporation of US, a renowned manufacturer of specialty steel.
The company will also import special steel from Thyssen and buy cold rolled steel from Essar and Tata Steel.
The company plans to expand its silicon steel production facility from the existing 40,000 tonnes to 60,000 tonnes per annum.
At present, the companys specialised silicon steel unit manufactures 35,000 tonnes of grain-oriented steel and 5,000 tonnes of mild steel.
