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IMFA awaits group firm recast for merger plan

Calcutta, July 27: Indian Metals & Ferro Alloys (IMFA) will consider a merger with its associate company, Indian Charge Chrome (ICCL), once the latter’s financial restructuring plan is approved by financial institutions.

IMFA director Subhrakant Panda said both companies have broad synergies in operations and management, which need to be tapped. “We are looking forward to the corporate debt restructuring package for ICCL, which is likely to be cleared soon. All plans, including a merger between IMFA and ICCL, will be considered after that is through,” he said.

IMFA, the country’s largest exporter of ferro-chrome, promoted ICCL about two decades back, and now holds around 44 per cent stake in the company. If the two are merged, the new entity will emerge as the largest producer of ferro-chrome in the domestic market.

As union between ICCL, which has been suffering losses, and the profit-making IMFA does not make sense at present, Panda said.

To bring ICCL back on track, the promoters have committed 85 per cent of the firm’s net cash flow, and that of IMFA’s, to repay creditors.

“This clearly shows how keen we are to help the company find its way out of the current crisis,” said Panda, who is also the joint managing director of ICCL.

“ The prolonged slump in the steel market was a big problem. At the same time, the delay in order of mining lease and violation of conversion agreement by the Tata Steel also contributed to the losses,” Panda said.

Tata Steel agreed to use ICCL for converting chrome ore into charge chrome. But Panda said Tata Steel failed to honour its commitment, leaving ICCL in the lurch. Both the companies went into arbitration in June 1994.

Panda said they are hopeful of getting their claims worth Rs 211 crore following a recent Calcutta High Court judgement which is claimed to have upheld ICCL’s argument and asked both firms to appoint a chartered accountant to evaluate claims.

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