ICVL not to place rival bid for Riversdale: C S Verma | business | Hindustan Times
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ICVL not to place rival bid for Riversdale: C S Verma

International Coal Ventures Ltd - a consortium of five state-run firms - today said it would not bid for Australian entity Riversdale Mining, which has already received AUD 3.9 billion bid from mining major Rio Tinto.

business Updated: Jan 27, 2011 22:02 IST

International Coal Ventures Ltd - a consortium of five state-run firms - said on Thursday it would not bid for Australian entity Riversdale Mining, which has already received AUD 3.9 billion bid from mining major Rio Tinto.

The decision was taken unanimously by the ICVL board, which comprises Steel Authority of India, Coal India, National Mineral Development Corporation, Rashtriya Ispat Nigam and National Thermal Power Corporation.

"We have discussed the due diligence report given by Citibank but our board took a decision not to bid (for Africa-focused Riversdale Mining)," SAIL Chairman C S Verma, who also heads ICVL, told reporters after the board meeting.

He, however, refused to provide details for not placing bids for Riversdale, in which Tata Steel has 24.4 per cent stake saying, "I can't tell you the details."

Verma said the decision to not to bid was a "conscious" and "unanimous" one.

"We discussed in detail the pricing scenario, future scenario, reserves available, various competing offers available and took a conscious decision not to bid. It was a unanimous decision," he said.

ICVL board meeting on January 22 on the issue had remained inconclusive.

On January 24, Riversdale had said that its board of directors, including Tata Steel nominee N K Misra, had recommended Rio Tinto's 3.9 Australian dollar takeover bid in the absence of a "superior proposal".

"... all the directors of Riversdale recommended, in the absence of a superior proposal, that Riversdale shareholders accept the offer by Rio Tinto to purchase all Riversdale shares for 16 Australian dollar cash per share," Riversdale had said in a statement.

It had said that N K Misra's recommendation was given in his capacity as a director of Riversdale and did not reflect Tata Steel's position.

Tata Steel, through its wholly-owned subsidiary TS Global Minerals Holdings, is the single largest shareholder of Riversdale.

Misra is also the vice president and group head of mergers and acquisitions at Tata Steel. His move to abstain from voting in December had sparked off speculations that Tata Steel may explore bidding for Riversdale.

Meanwhile, Tata Steel is yet to come out with its strategy on the issue.

Last week, Tata Steel Group CFO Koushik Chatterjee said the company would continue to be a coal consumer for its future expansion. "Therefore, we would want to get that (Riversdale) economic interest," he had said.

Riversdale has about 13 billion tonnes of rich coking and thermal coal reserves in its Benga and Zambeze projects in Mozambique.