The Telegraph
Since 1st March, 1999
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Ispat in overseas deal rush

Calcutta, May 9: At a time when the Laxmi Niwas Mittal-owned Mittal Steel is planning a 10-million tonne steel plant in Jharkhand, his younger siblings, Pramod and Vinod, have stepped on the gas on acquisition of overseas assets.

Global Steel Holdings (GSHL), controlled by Pramod and Vinodís Ispat Group, has acquired a one-million-tonne steel unit in Turkey in an acquisition that will be completed by the end of this month, company sources said.

This deal comes close on the heels of the groupís purchase of a steel plant in Bulgaria last month. The Turkey unit takes the combined capacity of Global Steel Holdings and Ispat to 15 million tonnes. It now straddles the Philippines, Nigeria, Bulgaria, Bosnia, Libya and India. This compares with L .N. Mittalís combined capacity of 70 million tonnes ' spread across 14 countries.

If the Jharkhand plan falls into place, it will mark the entry of the Calcutta-born L.N. Mittal into India, which has so far been the domain of his brothers. The Pramod-Vinod duo is also considering a 5-million tonne greenfield plant in Orissa, the other eastern state sitting on massive iron ore reserves after Jharkhand and Chhattisgarh.

GSHL will pay close to Rs 350 crore, or $78.4 million, to pick up a 54.68 per cent stake in the Turkish steel maker Izmir Demir Celik (IDC). Against this, it will fork out $300 million, or Rs 1,300 crore, for the Bulgaria plant, which has a capacity to produce 2.2 million tonnes.

The Turkey deal comes with matching mills and backup infrastructure, including a captive port on the Black Sea. The unit, which manufactures long steel products, exports 75 per cent of its output, mostly to Europe. It was put on the block by Turkiye Is Bankasi AS, the biggest non-state bank of that country.

It started looking for buyers in June 2003, when regulators ordered Turkish banks to trim industrial holdings. The agreement with GSHL was, however, signed last week.

IDC posted a net profit of Rs 164 crore in 2004, recovering from a net loss of Rs 46 crore in the previous year, GSHL sources said.

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