Gujarat NRE Coke is in advanced stage of negotiations with the Goa-based Dempo Group to acquire the latter's pig iron plant "" Aparant Iron & Steel. Gujarat NRE Coke has already finalised the deal with the Dempo group. | |
| Sources close to the development told Business Standard, "Gujarat NRE Coke has already signed a preliminary deal to acquire 100 per cent of Aparant. Aparant has an outstanding debt burden of around Rs 70 crore and it is trying to restructure its debt. Once the decision on debt restructuring is taken, the final valuation of the company will be done." |
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| Gujarat NRE Coke is also believed to be looking at acquisitions of larger plants with a capacity of up to 1 million tonne per annum. The company is currently evaluating some acquisition targets in Karnataka, Uttar Pradesh and Orissa, sources said. |
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| According to sources, the payout for Aparant acquisition could be around Rs 50 crore, depending on the debt restructuring scheme. |
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| "In case the debt is successfully restructured, the company's valuation will be higher. However, if the debt is not restructured, then the payout could be less." |
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| The company is talking to the lenders for this purpose. |
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| Aparant has a 1.55 lakh tonne pig iron plant at Costi, along with a mini blast furnace with a capacity of 250 cubic metre, and a 4 mw gas-based captive power plant. Aparant has been reporting losses for the last two years. |
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However, sources said that the turn of the steel cycle has helped the company to reduce its losses. Gujarat NRE Coke also has plans to upgrade and enhance the capacity of the plant.
| A correction The Dempo group has denied that Gujarat NRE is set to acquire its pig iron plant, Aparant Iron and Steel Private Ltd. It has clarified that though some very preliminary discussions were held some time back on this, no understanding on any definite "deal" had been reached.
The Dempo group at present does not propose to hold any further dialogue with the promoters of Gujarat NRE on this matter, the group said. Responding to a news report published in Business Standard of September 17, 2004 ("Gujarat NRE set to acquire Dempo unit)," the group also denied that Aparant has a debt burden of Rs 70 crore, that it is trying to restructure its debt and that the final valuation of Aparant would be done after the debt was restructured, as Business Standard reported.
Gujarat NRE Coke managing director Arun Kumar Jagatramka too has clarified that Gujarat NRE has not finalised any deal to acquire Aparant Iron & Steel from the Dempo group, though he said: "The company has been evaluating and discussing various acquisition opportunities that are available in the market."
The error is regretted. |
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