Tata Metaliks, 3 others in race for IISCO unit

Tata Metaliks, Pawan Ruia, Bhushan Steel and Ruchi group (Indore) have expressed interest in acquiring Kulti Works of IISCO Steel Plant.

According to sources close to the development, the four parties have submitted expressions of interest for the acquisition, which would be evaluated by SBI Capital Markets.

If the bidders meet the qualification parameters, the parties would sign a confidential information memorandum for due diligence after which the price bids would be submitted. The last date for submitting EOI was April 26.

Apart from the plant and machinery the bid also includes factory land of 218.5 acres. The exact location of the land is 22 km from Burnpur and about 100 km from Kolkata.

Industry sources said the land and casting facilities were the main attraction in the bid. With the availability of pig iron from the IISCO plant, any company would have a clear margin of Rs 3,000 a tonne.

Pawan Ruia, who recently bagged Dunlop India and was on an expansion spree, said that there were synergies with the defunct foundry unit acquired from Mukund.

The IISCO bid includes Kulti Works (Main), light casting works (located adjacent to main works), a 33 kw power sub-station and a Monberia water pumping station.

This was not the first time that bids were invited for Kulti Works. Shut since April 1, 2003, EOIs were invited in the middle of 2004 and three parties responded. However, what happened to the earlier bids was not known.

According to the terms of the bid, the buyer would not have any liabilities with respect to employees, ongoing legal cases, prospective legal claims or loans.

However, the buyer would have certain obligations for power supply to Burnpur Works, Ramnagore Colliery on cost recovery basis.

The buyer would have also obligation to maintain and operate the Monberia river water pumping station and pipeline into Kulti Town Settling Tank and supply alum treated water. IISCO would have to pay Rs 17,000 per gallon for the same.

The bid does not include the adjacent township of Kulti spread over 548 acres with residential quarters, schools, hospitals, club and golf course. The total land is around 850 acre with 2,300 residential units.

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