Linde India, previously known as BOC India, may seek compensation from Tata Steel for additional cost it incurred due to delay in commissioning of the steel plant at Kalinganagar in Odisha, a top official of the industrial gas major today said.
The delay was adding to financial cost of Linde for assets created for the proposed steel project. Linde was setting up two air separation units at Kalinganagar for the proposed integrated steel plant for Tata Steel and one for Jindal Steel and already invested Rs 700 crore.
Linde India chairman Sanjiv Lamba replying to shareholders' question at the AGM today said the company planned to seek compensation from Tata Steel in the proposed next meeting with them on Tuesday for costs incurred due to delay in the Kalinganagar steel project.
"We normally seek some adjustments on our receivables so that company protects its interest cost for the investments incurred while, capacity could not build up due to delay in project commissioning," he said.
The company said Linde had sought and received some benefits as compensation from Rourkela Steel plant for similar delays.
Tata Steel had indicated their first phase of three million tonne capacity will get commissioned by last quarter of
FY 15'.
Linde managing director Moloy Banerjee explained that such compensation demands are not be in the form of cash.
Linde was facing steep increase in interest and depreciation cost causing net loss in the January-March 2014 quarter.
Lamba in his speech had said net profit was lower in calender year 2013 as a result of significantly higher finance costs on long term borrowing and higher depreciation following the capitalisation of the new plants.
Linde was weighing various options on its idle and not profitable assets.
"We are reviewing our idle assets. We have already closed Tarapore and will review five assets in Jamshedpur," Banerjee said.
He indicated the opportunity to hive-off Tarapore land which will about 10-12 acres.
Banerjee also said the company was bullish about their proposed units for petrochemical cluster at Dahej and steel cluster at Kalinganagar.
