Andhra Pradesh - Visakhapatnam   

RINL getting ready to pick up stake in Bird Group

VISAKHAPATNAM: With the UPA Government deciding to sell its equity in Bird Group of Companies (BGC), Rashtriya Ispat Nigam Limited is getting prepared after a legal exercise to have a majority control in it.

The takeover, which will take some time due to valuation to be done by merchant bankers, will give the much needed raw material security to RINL which owns Visakhapatnam Steel Plant. VSP is expanding its capacity from 3 million tonnes to 6.3 million tonnes with an investment of Rs.12,200 crores.

VSP’s production cost is exorbitantly high because unlike other major steel producers, it has been deprived of owning captive mines. BGC owns Orissa Mineral Development Corporation (OMDC), Bisra Stone Lime Company (BSLC), Eastern Investments Ltd (EIL), Karanpura Development Company Limited, Scott & Saxby Ltd, Burrakar Coal Company Ltd and Borrea Coal Cos. Ltd. RINL is keen on having majority stake in the first three companies.

As per indications, there will be compensation/redeployment for staff of four sick companies in the group, considered financially unviable. Merchant bankers are being appointed to assess the assets and liabilities of the companies, sources told The Hindu. OMDC, BSLC and EIL are listed on the Calcutta Stock Exchange.

OMDC, which was incorporated in 1918, owns 200 million tonnes of iron ore in Barbil in Keonjhar district of Orissa.

It is hoped that OMDC, which has cash reserve of Rs.718 crores, is also very much interested to strategic control by RINL as it would enhance its brand image.

The Centre will offload 53 per cent stake in EIL, an important arm of BGC. EIL has 34 per cent stake in OMDC. The government is willing to sell its 14.2 per stake in OMDC to RINL.

The strategic alliance after clearing the legal hurdles has to be vetted by Securities and Exchange Board of India (SEBI).

The Parliamentary Consultative Committee of Steel Ministry, which in Delhi recently, expressed satisfaction over the restructuring of BGC and involvement of RINL in it.

Incidentally, RINL Chairman and Managing Director P.K. Bishnoi is the Non-Executive Chairman of BGC.

RINL entered into a joint venture with Mangalore Ore India Ltd sometime ago to manufacture ferro-alloys.

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