Usha Martin forms panel to sell steel biz

18th june 2018

After a board level coup led by SBI in Usha Martin last year that replaced chairman Prashant Jhawar by former Sebi chief G N Bajpai, the board of world’s largest wire rope maker has given go ahead to MD Rajeev Jhawar to dispose steel business of the company. This will help the company to become almost debt-free as the valuation of the steel business (over Rs 5,500 crore) will be more than the total debt (Rs 3,800 crore) of Usha Martin.

It is also learnt that Arcelor Mittal may also bid for the steel business, along with Tata Steel and JSW.

Top sources in the company told TOI that the steel business being earmarked for sale, includes 135 MW power plant and lucrative iron ore mine. The Usha Martin steel facility has a capacity of one million tonne and the speciality steel business, consisting of a fully integrated steel plant. “Selling of steel business means the entire value chain of steel,” the sources added.

The company on Monday constituted a committee of independent directors to oversee the process of sale of steel business. The members of this committee are G N Bajpai, Jitender Balakrishnan, V R Iyer, Salil Singhal, Partha S Bhattacharyya and Aarthi Ramakrishnan.

“The committee will appoint investment banker, consultants and advisors for sale of steel business,” sources said. Explaining the change in plan, a top official said initially plan was to hive off wire rope but the company realised later that valuation of steel could be better. Incidentally, the turnover of steel business is Rs 3,000 crore, while wire rope business has a turnover of Rs 1,800 crore. Steel amounts to more than 60% of the revenue of the company.

“Wire rope is more stable business and we are number one in the world. Besides, the valuation in case of steel now would be better,” a source said.

Source: TNN