Bhubaneswar, Oct. 24: Indian Metals and Ferro Alloys (IMFA) Ltd, the country’s largest producer and exporter of ferro alloys, today announced the merger of its subsidiary Indian Charge Chrome Ltd (ICCL) with itself.
IMFA managing director Subhrakant Panda said, “With the merger, Indian Metals & Ferro Alloys Ltd (IMFA) consolidates its leadership position as the largest fully integrated producer of ferro alloys in the country with 157 MVA installed furnace capacity backed up by a 108 MW coal-based power plant and chrome ore mining tracts.” He said the merger will help them fully explore the operational and financial synergies and to effectively implement the aggressive plans IMFA has for going forward.
With domestic and international demand for steel going up significantly, Panda said the group planned to invest Rs 700 crore over the next three years to increase ferro alloys capacity from the present 2,35,000 tonnes per annum to 3,50,000 tonnes per annum.
“The company is also looking at power generation as a stand-alone business for which it is in the process of setting up a 30 MW dual fuel power plant and a 120 MW coal-based power plant,” he added.
Of the two plants, the 30 MW plant will use coal washery rejects and furnace gas and its output used for IMFA's own consumption. Output from the second plant, which will generate 120 MW, is likely to be sold at market rate, Panda said. “We hope to reach a turnover of Rs 1,000 crore by 2010.”
However, the net worth of the new entity is only Rs 124 crore as on March 31 this year. “The company has set a turnover target of Rs 500 crore by the next financial year and Rs 1000 crore by 2010,” Panda said.
An integral part of the merger scheme was the formation of an independent trust, which will hold about 4 per cent of the post-merger equity of IMFA to be distributed to small shareholders at a minimum discount of 50 per cent to the market price.
Outstanding loans of the group stand at Rs 570 crore after restructuring and Rs 200 crore has been paid off in the last four years.
