Biggies queue up for Usha Martin steel business

KOLKATA: A clutch of steel giants has entered into non-disclosure agreement with Usha Martin, one of the largest wire rope manufacturers globally, for taking over its steel business. The steel majors in the fray include Vedanta, JSW, Liberty, Tata Steel and Kalyani Group.

Usha Martin - Rajeev Jhawar

Following the annual general meeting on Tuesday, Usha Martin MD Rajeev Jhawar said he is hopeful of getting offers from steel giants by the end of this month. Usha Martin, which is reeling under a debt burden, had decided to look for buyers for its steel business in June this year. Jhawar added that all of them are doing due diligence of the steel businesses.

Jhawar pointed out that besides these five steel giants, HEG had also showed interest initially but later on didn’t sign the non-disclosure agreement. He also made it clear that reviving the company is the priority of the management. “We hope to be in dividend list next year,” he added. Usha Martin has not declared a dividend for the last four years.

Experts believe that this will help Usha Martin become almost a debt-free entity as the valuation of the steel business could be much more than Rs 5,500 crore, while the total debt of the company now stands at Rs 4,400 crore. Usha Martin chief financial officer Rohit Nanda said after the AGM that during the current fiscal, it would repay Rs 320 crore of debt.

According to sources, the steel business of Usha Martin includes a 135MW power plant and a lucrative iron ore mine. Its steel facility has a capacity of one million tonnes and the speciality steel business consists of a fully integrated steel plant. The company has also constituted a committee of independent directors to oversee the process of selloff.