Tisco in fray for Salem Steel
Gujral new IISCO chairman
Bengal to pay Rs 400 cr in cash & bonds to NTPC
SBI eyes temple gold for bond scheme
ITC for low excise rates

 
 
TISCO IN FRAY FOR SALEM STEEL 
 
 
BY A STAFF REPORTER
 
Calcutta, Feb 19 
Tata Iron and Steel Company (Tisco), which is planning to enter the stainless steel segment, has bid for the Salem Steel Plant. Salem Steel, which manufactures stainless steel, is being hived off as part of a Rs 8454 crore restructuring package that the government cleared earlier this week for the loss-laden Steel Authority of India Ltd.

However, Tisco will have to contend with competing bids from SM Demag of Germany, Avesta Sheffield of the UK and Jindal Strips, which controls about 40 per cent of the Indian stainless steel market.

JM Morgan Stanley was appointed by SAIL to find out buyers for the Salem steel plant. The merchant banking firm has already received bids for the plant in India and London.

Salem Steel, the second largest producer of stainless steel in the country, currently has a capacity of 1.86 lakh tonnes for hot rolled production and 70,000 tonne for cold rolled steel production.

SAIL had floated a global tender on January 30 last inviting bids for joint venture partner for its Salem Steel Plant (SSP). The last date of receiving bids was February 18.

SAIL has decided to hold a minority stake in Salem Steel and hand over management control to the strategic partner.

Last November, SAIL had floated a tender for a joint venture partner with whom it planned to set up steel-making facilities at Salem. “Since the response was lukewarm, we had to float a new tender where we offered management control,” a senior SAIL official said.

Salem Steel produces stainless steel for the higher end of the market. It is the low-end utensil sector that absorbs low-nickel stainless steel, which dominates the Indian stainless steel market. Earlier, Salem Steel used to export 30 to 50 per cent of its production, but has now been priced out of the market.

Sources said SAIL has decided to move out of the special steels business and concentrate on mild steel. SAIL has the potential to become the lowest cost mid-steel producer in the world and would like to develop along that line. In the highly competitive steel scenario that has now emerged it is not possible for SAIL to carry the burden of loss-making units that have no potential.    


 
 
GUJRAL NEW IISCO CHAIRMAN 
 
 
BY A STAFF REPORTER
 
Calcutta, Feb 19 
The chairman of the Steel Authority of India Limited (SAIL), Arvind Pande, has resigned from the board of the Indian Iron and Steel Company (IISCO). Pande was the chairman of IISCO, which is a 100 per cent subsidiary of SAIL.

V. Gujral, managing director of Bhilai Steel Plant has been appointed as the part-time chairman of IISCO with effect from today.

Gujral, who is already an IISCO board member, is an old IISCO hand. He was with IISCO before he joined Bhilai in 1993.

Sources said that Pande’s resignation may be an immediate fall-out of the cabinet clearance of SAIL’s restructuring programme. Under the programme, SAIL has been allowed to bring in a joint venture partner for IISCO and reduce its stake in the company to a minority. The other members on the IISCO board are V. S. Jain, director (finance), Suresh Pandey, director (operations), S. C. K. Patne, director (projects), T. Tiwari, executive director (personnel), D.V. Singh, joint secretary (steel ministry), C.S. Rao, additional secretary and financial advisor (steel ministry) and Sunil Mitra, representing the West Bengal government.    


 
 
BENGAL TO PAY RS 400 CR IN CASH & BONDS TO NTPC 
 
 
BY OUR SPECIAL CORRESPONDENT
 
Calcutta, Feb 19 
The National Thermal Power Corporation today asked the West Bengal government to make an upfront payment of Rs 200 crore and issue bonds for another Rs 200 crore within the next 10 days if it wanted to head off the possibility of a regulation in power supplies because of its failure to clear dues.

NTPC director (commercial) H.L. Bajaj met the WBSEB chairman G.D. Gautama to arrive at a settlement over the state’s Rs 1175 crore dues.

After the meeting held at Bidyut Bhawan, Bajaj told The Telegraph, “The WBSEB chairman was positive that they would be able to pay the dues in time. I will return on February 28 by which time we hope that the utility will obtain the requisite clearances.”

If it fails to do so, NTPC is determined to start regulating power supply from March 1.

Sources said NTPC had settled its arrears up to March 31, 1999 with the Uttar Pradesh State Electricity Board. The cash-strapped UPSEB had handed over assets including the Tanda thermal power station, valued at Rs 1000 crore, to settle its dues. The state government has also agreed to adjust dues amounting to Rs 640 crore against the proceeds it receives from the Union government as plan assistance.

NTPC will begin its discussions with Bihar government officials next week over its arrears. NTPC has threatened to regulate power supplies to all three states if they fail to clear their dues by the March 1 deadline.

NTPC is also under pressure from more disciplined consumers in the western and southern states which have reduced their arrears to about two-and-a-half month billings. Madhya Pradesh has dues amounting to 2.2 months of billings, Gujarat State Electricity Board (2.4 months), Maharashtra State Electricity Board(2.8 months), Andhra Pradesh ( 2.2 months), Karnataka (2.8 months) and Kerala (1.6 months).

Bengal’s dues amount to as high as 55 months’ billings. WBSEB has had marathon meetings with financial intermediaries, merchant bankers and others over the last fortnight and has decided to issue bonds to raise the funds to pay off NTPC. Although the exact size of the bond issue has not been decided, the board today indicated to the central sector power utility that it would be able to issue bonds worth at least Rs 200 crore.

WBSEB is however yet to receive a formal clearance from the state government on the issue of these bonds though several rounds of discussions have been held on the issue.    


 
 
SBI EYES TEMPLE GOLD FOR BOND SCHEME 
 
 
FROM NITHYA SUBRAMANIAN
 
New Delhi, Feb 19 
The State Bank of India (SBI) is planning a rescue act for its gold bond scheme.

The bank, which launched the first gold bond scheme, wants various state governments to speed up decisions in permitting trusts to invest the gold held by them in the scheme.

Getting the trusts to invest in the scheme is important because the bank has managed to garner only about 1.6 tonnes of gold so far, against an ambitious target of 100 tonnes in the first year.

SBI managing director S.R Iyer said, “There is lot of gold with temples in Southern India. We are trying to get them to deposit it in our scheme. But the state governments have to give their approval before the trusts can deposit the gold.”

Bank sources said that all the trusts in the southern part of the country, which is the main target of SBI, are governed by the state governments. “Any investment decision made by these trusts have to be vetted by the state government. The bank is in touch with all the relevant authorities in the state government to ensure that the trusts invest in the gold bond scheme.”    


 
 
ITC FOR LOW EXCISE RATES 
 
 
BY A STAFF REPORTER
 
Calcutta, Feb 19 
A moderate excise duty structure would encourage farmers to grow better varieties of tobacco and make the smuggling of cigarettes unremunerative, ITC chairman Y. C. Deveshwar said today. The excise moderation could also expand the duty base and bring prosperity to farmers, he added.

The ITC chairman was speaking at the golden jubilee celebration of the research institute of ITC’s Indian Leaf Tobacco Division at Rajamundry, Andhra Pradesh.    

 

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