Essar Steel buys out Hy-Grade Pellets Ltd (HGPL) and Steel Corporation of Gujarat Ltd (SCGL) from Stemcor for $450 mn

9th June 2005: Essar Steel has completed the acquisitions of Hy-Grade Pellets Ltd (HGPL) and Steel Corporation of Gujarat Ltd (SCGL) from Stemcor, UK, making both of them fully-owned subsidiaries. The acquisitions of HGPL and SCGL were completed at a cost of $450 million (approximately Rs 1,950 crore) and funded through equity by way of issuance of Compulsorily Convertible Preference Shares as approved by shareholders and regulatory authorities.

With these acquisitions, Essar Steel becomes a totally integrated steel producer with end-to-end control over raw materials, processes, technology and finished products, an Essar Steel release said. Commenting on the completion of the transaction, Essar Steel managing director Prashant Ruia said, “We expect these acquisitions to bring in increased synergy and seamless integration in our operations and help strengthen the company.” “We look forward to consolidating our position in the market, especially in the value added segment,” he added.

The acquisition of HGPL is expected to bring in benefits of high quality raw material and considerably better yields in steel making, Essar Steel reckons. HGPL operates a four million tonne per annum pellet plant in Visakhapatnam.

SCGL’s acquisition will bring in 1.2 million tonne of cold rolling capacity into Essar Steel, making it one of India’s largest producers of cold rolled products. The company expects this to provide a wider market penetration capability and offer a hedge against cyclicality in domestic and international markets.

IISCO-SAIL to merge shortly

9th June 2005: The long-awaiting merger of steel PSUs, IISCO and Steel Authority of India has been cleared by the Steel Ministry and the proposal is awaiting Cabinet nod, steel minister Ram Vilas Paswan said today. "The proposal for merger of IISCO with Sail has already been cleared by the Ministry. It has been sent to Cabinet for its approval," said Paswan.

He said the new entity would have at its disposal 35-40 million tonnes iron ore reserves lying with IISCO. Paswan said the Ministry was discussing proposal for merging other small companies like Rashtriya Ispat Nigam Ltd with Sail but "this had not even reached the stage of examination, let alone consideration".

"After a complete study of all operational aspects, the proposals, if found feasible, will be implemented in a time-bound manner," he said. Paswan said the Ministry was holding discussions on whether to create two separate entities-- one for iron ore mining and other for steel production. "We are looking into the issue from management point of view and every proposal has its own pros and cons. So we are not in any hurry," he added.

Indiabulls sells 42.5% in subsidiary to Amaprop

8th June 2005: Indiabulls Finance Company, a wholly owned subsidiary of Indiabulls Financial Services, has issued 32,33,396 equity shares of Rs 10 each to Amaprop Ltd, an entity managed by Amaranth Advisors LLC, representing 42.5% of the company for Rs 130.97 crore, Indiabulls informed the Bombay Stock Exchange.