Shareholders of Steel Authority of India Ltd. (SAIL) on Thursday approved the scheme of merger of Maharashtra Elektrosmelt Ltd. (MEL) with the ‘Maharatna' company under Sec.391-394 of the Companies Act, 1956. The proposal is now under consideration of the Ministry of Corporate Affairs.
At the SAIL's 38th annual general meeting here, shareholders also approved the board recommendation for final dividend payment of 17 per cent on paid-up equity, apart from the interim dividend of 16 per cent already paid earlier this year. This takes the total dividend payment for 2009-10 to 33 per cent.
Speaking at the AGM, SAIL Chairman C. S. Verma informed shareholders that the government had approved a 10 per cent FPO (follow-on public offer) of shares and an offer for sale (disinvestment) of 10 per cent of the government's holding in the company in two discrete tranches.
The total issue in two equal tranches, Mr. Verma said, would comprise a fresh issue of 41.30 crore shares and disinvestment of government equity holding of an equivalent amount. Each tranche would consist of 5 per cent (20.65 crore shares) of FPO and 5 per cent of equity divestment. The offers, he said, were to be issued at appropriate times in keeping with SEBI guidelines and prevailing market conditions. The first tranche was likely to hit the market during the current, subject to government and regulatory approvals.
Mr. Verma also informed that SAIL had made plans to set up additional incremental power generation capacity to meet the enhanced power requirement of its steel plants and mines in the coming years. As for the steel major's short-term outlook, Mr. Verma said that to offset rising input costs, SAIL has laid thrust on improving productivity across the organisation “encompassing people as well as production facilities and processes.” To meet the enhanced iron ore requirement of about 43 million tonnes for hot metal production of 23.5 million tonnes after the first phase of modernisation and expansion is completed in 2012-13, the company was pursuing the issue of early renewal of leases of Chiria and Gua mines, he said.