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Shree Uttam Steel and Power, a part of Uttam Galva Group, and Posco Korea, on Tuesday agreed to set up an integrated steel manufacturing facility under a joint venture (JV) arrangement in Maharasthra. The plant — the first Indian facility for the global giant whose $12-billion proposed project in Odisha has been stuck in regulatory tangles for a decade — would be built with an estimated investment of $3-billion steel plant at Satarda in Maharashtra .
The companies signed a memorandum of agreement, which is the first step in establishing a JV, in Mumbai on Tuesday. "The proposed JV plans to set up three million tonne per annum integrated steel plant at Satarda in Maharashtra in two phases," the company's said in a press release.
Uttam Galva has been associated with Posco across various aspects of the steel business over the years.
"Today's signing signals our intention to further advance our collaboration with Posco to a higher level on the value chain. Also we feel that the future of the Indian steel industry is bright and we are poised to as a nation make a quantum leap on the global steel stage," said Ankit Miglani, director, Uttam Galva.
“To start with, Miglani family will hold majority stake of 80 per cent and Posco will hold remaining 20 per cent in the JV. The terms will be revisited as the project progresses,” Miglani said. The debt equity ratio is 2:1 and the work on project will start in mid-2016, he added.
Shree Uttam Steel & Power is fully-owned by the Miglani family, who are the co-promoters of Uttam Galva Steels with ArcelorMittal. Uttam Galva shares saw a spurt in volume on BSE and the stock closed at Rs 40.85 apiece, up 7.93 per cent from previous close.
This is the second major manufacturing facility announced in Maharashtra within a week, after Taiwan’s contract electronics manufacturer Foxconn this weekend announced a $5 billion investment for a plant in the state.
