JSW top bidder for Bellary Steel & Alloys

Close on the heels of bagging Ispat Industries, Sajjan Jindal-controlled JSW Steel has emerged the highest bidder for debt-laden Bellary Steel & Alloys.

There is, however, a twist: Sesa Goa, India’s largest producer and exporter of iron ore in the private sector, was told in the morning that it had emerged the only qualified bidder when the tender was opened.

“By afternoon, we were informed there was another bid from JSW, which was higher,” Sesa Goa Managing Director P K Mukherjee said.

While Sesa Goa’s bid was marginally higher than the Rs 205.63-crore reserve price at Rs 206 crore, JSW’s bid came in at Rs 210 crore. JSW did not comment on the development.

 

Sesa Goa was then asked to participate in inter se bidding, which the company declined. A clause in the tender said inter se bidding would be held among those found eligible and the highest bidder would be declared successful.

PRIZE PLANT

• Sesa Goa was first told that it was the only qualified bidder 
• Later, it emerged that JSW had submitted a higher bid 
• Sesa declined to participate in inter se bidding process 
• Bellary Steel plant is not yet built, but has 700 acre of land

“I have been trying to call IFCI, but there has been no response from their side,” Mukherjee said. Bellary was being sold by a consortium of lenders led by IFCI.

Bellary Steel has a half-constructed plant, with a rated capacity of 0.5 million tonne. “The plant was never completed and ran into debt,” Mukherjee said. But its biggest asset is 700 acre freehold land.

The sale was conducted under the Securitisation & Reconstruction of Financial Assets & Enforcement of Security Interest Act. The SARFAESI Act empowers banks or financial institutions to recover non-performing assets without court intervention.

Companies were allowed to bid separately for the land, integrated steel plant and machinery. However, Sesa Goa and JSW submitted composite bids.

JSW’s seven-million tonne steel plant is in the Bellary-Hospet region. With Ispat, JSW will become India’s largest steelmaker by March 2011, when its Vijayanagar plant commissions an additional three million tonne, taking its total capacity to 14.3 million tonne. The company has set itself an ambitious target of 34 million tonne by 2020.

With inputs from Ishita Ayan Dutt and Shubhashish