The Germany-based ThyssenKrupp has showed interest in the ailing Alloy Steel Plant (ASP) from the Steel Authority of India Ltd (SAIL) stable. The other bidder for the plant, UK-based Avesta Sheffield, has backed out of the bidding process. As a result, the German firm has emerged as the sole bidder for ASP.
The process of plant visit and due-diligence will begin shortly. To prepare for the change, SAIL chairman Arvind Pandey met leaders of trade unions at ASP last week and urged them to turn the plant into a profitable one within one-and-a-half years. He also urged the employees to increase production.
According to sources, around Rs 90 crore will be pumped into the plant before it is handed over. It seems that a portion of the required fund will be provided by SAIL and the rest from a restructuring pool. However, the restructuring fund with a corpus of Rs 1,500 crore is yet to be formalised by the government.
SAIL's experience with ThyssenKrupp in case of Iisco not being a happy one, the management might also extend the period of the tender for another two months in the hope of attracting another bidder, said sources.
A large 7000-odd labour force, coupled with outdated machines, were the major reason for ASP's poor performance. Over a period of time, this has made the plant sick, leading SAIL to decide to put it on the block. The plant has announced a second voluntary retirement scheme by which it expects to reduce manpower to 1,500. The joint venture participation tender was floated a few weeks ago and the offer period expired on August 25.
ThyssenKrupp is a major industrial group with three main areas of activity -- steel, capital goods and services. It has six operating units -- steel, automotive, elevator, technologies, materials and services are being further developed as part of an active portfolio management program.
The unsuccessful bidder for ASP, Avesta Sheffield, a subsidiary of British Steel plc, is the UK's largest manufacturer of stainless steel and was formed in 1992 after the merger of British Steel Stainless, in the UK, and the Avesta Group, in Sweden. It supplies stainless steel to a range of customers.
