Stemcor’s Indian assets bidding deadline is extended to 6 Jan, 2014. Extension was in consent with the buying parties, according to a senior official of JSW Steel Limited. JSW is happens to be the most competitive contender for the Stemcor’s Iron ore assets in Odisha.
Owing to an extended slowdown in Steel demand & financial liquidity crisis across the world, Stemcor is pressurized to sell its Indian assets. It owes its international creditor a debt near to USD 1.2 billion.
JSW needs 18 MnT of Iron ore to produce 10 MnT of Steel. JSW complained about short supply from Karnataka, owing to crackdown on illegal mining. If JSW is able to make a competitive bid & purchase Stemcor’s assets of 4MnT Pellet plant, then it would be its first captive Iron ore mine. Stemcor’s asset BRPL (Brahmani River Pellets Limited) is a major stake in an Iron ore mine & a slurry pipeline in Odisha.
Other prominent bidders are Tata Steel Limited & Jindal Steel and Power Limited. The alliance from the companies said that they would bid for the assets valued at near to USD 1 billion by investment bankers. Tata Steel’s officials also expressed that the company did not have a serious interest in Stemcor.
The Goldman Sachs Group, Inc. leading global investment banking and management firm is appointed to scout for the possibility of a sale of Stemcor’s Indian assets. The sale has to be swift as the loan repayment deadline is due this month.
“We have never publicly announced a deadline on the sale process and all negotiations remain confidential” said Charles Armitstead, the spokesperson for Stemcor, London.
Another twist came in September that Kolkata High Court put a stay on the assets sale owing to a petition filed by ICICI Bank Limited. According to the bank, it was concerned about its loan of INR 5.87 billion to Stemcor. But the reports also come across, saying that ICICI Bank and Stemcor are discussing and may reach an out-of-court settlement. Though, Armitstead did not confirm if an out-of-court-settlement is being worked upon.