On an auction of USD 800 million assets, Stemcor shortlisted India’s major steel giants for final bid.
Steel Marketing Corporation (Stemcor), the largest independent steel trading company (unlisted) in the world has put its Indian assets on an auction in the month of May 2013 owing to debt of about USD 850 million. Indian Steel Giants such as Tata Steel, Essar Steel, JSPL Steel and a Swiss firm Glencore have been shortlisted by the company to participate in its final bid. There are a few more companies in the race to place their final bids in the month of November 2013.
Being one of the most lucrative auctions, almost all Indian steel participated in the initial bid. The contenders like Adhunik Metaliks, Electrosteel Castings, SAIL, Vale and Vedanta Group and many more showed their expression of interest on Stemcor Indian asset auctions. However, on a recent development the company has shortlisted a few India’s steel giants to place their final bid.
Stemcor in India owns 100% subsidiary company Brahmani River Pellet Limited (BRPL). BRPL owns 4 MnT pa capacity Pellet plant in Jajpur (Odisha) and a Iron ore beneficiation plant (4 MnT pa) in Barbil (Odisha). Stemcor also owns major stake in Iron ore mines with 100 MnT as reserves along with AMTC and 10% equity stake in Mideast Integrated Steel Limited (MISL), part of MESCO group. The overall valuation of these assets is close to USD 800 millions.
On one hand, SAIL with an intention to own Stemcor’s operating pellet plant and beneficiation plant showed its interest for the auction. On the other hand, JSW with a possible intent to gain access to mines in the eastern region is looking ahead for the acquisition. A well known steel manufacturer in Odisha is keen to obtain BRPL assets owing to the location advantage.
Nevertheless, the Kolkata High Court will wait till 6 December, 2013 pertaining to the warnings by the lender ICICI Bank.