Mining News Pro - According to latest reports, JSW, Tata Steel and UK based Liberty House have emerged as the top contenders for Usha Martin`s (UM) steel business, extending their rivalry over Indian stressed assets witnessed in the last six months. Currently, the companies are carrying out due diligence for the steel unit and price bids are expected to be called by the end of this month.
  Zoom:

 

According to Mining News Pro -According to latest reports, JSW, Tata Steel and UK based Liberty House have emerged as the top contenders for Usha Martin`s (UM) steel business, extending their rivalry over Indian stressed assets witnessed in the last six months. Currently, the companies are carrying out due diligence for the steel unit and price bids are expected to be called by the end of this month.

Apart from the three companies, Vedanta and Kalyani Steel have also expressed their willingness to acquire Usha Martin’s steel unit and has signed the non-disclosure agreement. However, as per the sources, these two companies are not actively pursuing to acquire it.

JSW, Tata Steel and Liberty House of the UK are locked in a separate battle to takeover Bhushan Power & Steel Ltd (BPSL) through the insolvency process. The matter will come up for hearing at the National Company Appellate Law Tribunal later this month. JSW has made the highest bid, but Tata Steel has challenged the process.

Usha Martin hopes to sell its steel business within the end of ongoing fiscal year FY19 despite the steel arm posting a rebound in both revenue and profitability in the first quarter of FY19. The company, which also makes wire ropes, posted 18.4% increase in revenue at INR 10.48 billion and a gross profit of INR 1.13 billion from the steel business in the Q1 ended in June.

UM which was incorporated in 1960 was globally known as a wire and wire rope player with the presence in several overseas locations before it went for backward integration and built a million tonne alloy steel plant.

Initially, the company was trying to sell the wire rope business in order to trim its accumulated debt of 45 billion and appointed RBS to find a buyer as no one was interested in the steel asset. Later, it brought in McKinsey to come up with a road map for the steel business. However, as the global steel cycle turned positive, backed by strong demand and prices, interest for the steel business seemed more.

Despite being outside the rigors of the Insolvency & Bankruptcy Code, 2016, Usha Martin`s sale process may be far from a regular corporate transaction amid the factions between the company`s promoters - Prashant Jhawar and his cousin Rajiv Jhawar as both are at loggerheads over the control and ownership of the business. As they equally own the 52.13% stake in Usha Martin, it would be impossible to strike a deal unless both the Jhawars agree.

 


Share the news

In Picture