Damodar Valley Corporation has agreed, in principle, to become an equity partner in the Bokaro power plants of the Steel Authority of India Ltd (SAIL).
"The power plants of the Bokaro Steel Plant are being transferred to a separate company in which Damodar Valley has agreed, in principle, to hold a 50 per cent stake," sources said.
There are two power plants at Bokaro Steel. While one has a capacity of 122 mw, the other has 180 mw. The value of the power plants has not yet been fixed.
The divestment of the Bokaro power plants is going to be similar to the divestment of the Durgapur and Rourkela power plants during the last fiscal.
The National Thermal Power Corporation (NTPC) had picked up a 50 per cent stake in SAIL Power Supply Company Ltd, a fully-owned subsidiary of SAIL, into which the two power plants were transferred.
Both SAIL and NTPC have a 50 per cent stake in the company. The transfer price of the two units, with a combined capacity of 240 mw, was fixed at Rs 391 crore.
SAIL did not go through a tendering process for the divestment in the Bokaro power plants.
According to sources, just as in the case of the Durgapur and Rourkela power units, it was decided to tie up with another public sector unit as the workforce in these power plants had expressed their willingness to remain a part of the public sector.
Apart from the power plants, SAIL has put up other units also for disinvestment during the current fiscal.
The steel major has put up Visvesvaraya Iron and Steel Plant and the fertilizer unit of the Rourkela Steel Plant for divestment.
Pune-based Indian Seamless Metal Tubes and Nagpur-based Sunflag Iron and Steel Company have bid for a 74 per cent stake in Visvesvaraya Iron and Steel Plant.
The last date for submission of bids for a 74 per cent stake in the Rourkela fertilizer plant has been extended by a month from to August 31, 2001.
Visvesvaraya Iron and Steel Plant is located at Bhadrawati in Karnataka. An ISO 9002 unit, it has the capacity to produce 77,000 tonne per annum of alloy and speciality steel and 2,05,000 tonne per annum of hot metal. As per the sources, SAIL has already initiated the due process with the two bidders.
SBI Capital Advisory Services has been appointed as the merchant banker for the divestment of the Rourkela fertilizer plant.
The fertilizer plant has become a non-viable unit on account of the fact that the raw material used there, imported naphtha, is not subsidised any longer.
