Pellet maker KIOCL to acquire 51% stake in Odisha PSU Idcol

21 November 2016

Leading pellet maker and a PSU under Union ministry of steel KIOCL is all set to acquire 51% equity in ailing Odisha PSU-Industrial Development Corporation of Odisha (Idcol) Ltd. KIOCL has been one of the front-runners in picking up controlling stake in the two Idcol units- Idcol Kalinga Iron Works Ltd and Barbil and Idcol Ferrochrome & Alloys Ltd after rounds of failed bidding by other PSUs like Steel Authority of India Ltd (SAIL) and National Aluminium Company (Nalco).

The financial bid submitted by KIOCL for acquiring majority stake in the two Idcol units has elicited positive response from the Odisha government. For the past few years, the state government was looking to induct a strategic partner to turnaround the ailing companies.

The state government has now sought the intervention of the Union steel ministry to speed up the acquisition process, which can mutually benefit KIOCL and Idcol.

“We find that there is a synergy between KIOCL and Idcol Group wherein KIOCL has managerial, technical, and financial strengths but lacks mining assets which is necessary for KIOCL’s sustainable operations. Idcol Group currently possesses mining assets which could be further augmented with mines under state dispensation route by the Odisha government”, Odisha’s chief secretary Aditya Padhi said in a letter to Aruna Sharma, the Union steel secretary.

Before going for acquisition, KIOCL had put forth certain conditions for compliance by Idcol and the Odisha government. The state government is mulling to provide sustainable iron ore and chrome ore mining assets of sizeable quantities since this was a precondition for the takeover and investment in capacity expansion in the two units.

Idcol has been engaged in the production of pig iron, cast iron spun pipes, and ferro alloys since the 1960s as value addition to its mining asset. But to stay competitive in the prevailing market, the state government had decided to rope in a strategic partner, inviting central PSUs to submit bids for acquiring management control.

Idcol Kalinga Works with its plant in iron-rich Keonjhar district produces foundry grade pig iron with a rated capacity of 180,000 tonne per annum. It also manufactures cast iron spun pipes with an installed capacity of 31,200 tonne every year.

Source – BS