SAIL buys defunct Malvika Steel
In an acquisition that would make steel czar L N Mittal proud, domestic steel major Steel Authority of India Ltd has acquired the defunct Malvika Steel for Rs 209 crore pipping Jaypee Group to the post. The perennially sick company was at one point of time being chased by ArcelorMittal itself.
“There has been no impact of the recession on public sector steel companies even as private sector units are facing problems of liquidity. SAIL’s acquisition of Malvika Steel is a case in point,” said Ramvilas Paswan, minister of steel. “For those with surplus funds like SAIL and National Mineral Development Corporation, this is the best time to expand and invest.”
Malvika Steel has a 0.85 million tonne integrated steel plant spread over 740 acre in Amethi but has operated only for three years before being shut in 1998. As on March 2008, SAIL had surplus cash of Rs 13,759 crore on its balance sheets. The PSU is working on a plan for investment in expansion of the company’s existing capacity.
“The bidding process was completed on February 20, where SAIL outbid Jaypee Group by Rs 1 crore. The company has already taken possession of Malvika Steel,” a senior steel ministry official said. The steel plant was floated by Vinay Rai-controlled Usha Group in 1998 but ran into financial trouble thereafter.