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Usha Martin hopeful of getting offers for its steel business
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SME Times News Bureau | 19 Sep, 2018
Speciality steel-maker Usha Martin, which has decided to explore the
sale of its steel business, is hopeful of receiving offers from bidders
by end of this month after the company entered into non-disclosure
agreement with steel giants, an official said on Tuesday.
"The
process of due diligence is on and hopefully, within this month, we
should be receiving offers," Managing Director Rajeev Jhawar said.
Steel
giants, including Tata Steel, Vedanta, JSW, Liberty House and Kalyani
Steel have signed non-disclosure agreements with it, he said after the
company's Annual General Meeting here.
The company, which has
been reeling under a debt burden, had decided to look for buyers for its
steel business to achieve the "objective of deleveraging the company".
According
to its latest annual report, its steel business achieved a sales
turnover of Rs 2,626.43 crore in the 2017-18 as against Rs 2,253.11
crore in the previous year, higher by 16.57 per cent.
During FY
2017-18 the export turnover of steel business was Rs 96.2 crore, which
was 3.66 per cent of its turnover, against Rs 102.8 crore in the
previous year. Steel contributed 63.35 per cent of its total revenue
during 2017-18 as compared to 62.48 per cent during 2016-17.
It makes alloy steel long products such as wire rods, bars, blooms and bright bars mostly for commercial vehicles and tractors.
The
company had earlier planned to sell its wire rope business but did not
succeed so far. "Our endeavour to address the debt burden of the Company
by looking for a buyer for our wire and wire ropes business has not met
with success so far," he said in the Annual report.
As on March
31, 2018, it total debt stood at Rs 4,600 crore. The company had repaid
close to Rs 540 crore in the last financial year, and is looking to
repay close to Rs 320 crore this fiscal, an official said.
However,
lenders led by the State Bank of India, had pushed the board of
directors of the company to remove Prashant Jhawar from the post of
non-executive chairman.
The board had, subsequently, appointed G.N.Bajpai as the non-executive chairman of the firm.
Prashant
and Rajeev Jhawar are in legal battles at the Kolkata bench of the
National Company Law Tribunal over the control of the company.
When
asked about the progress on settlement of legal disputes with
co-promoter, he said, the focus would be firstly to 'set the company on
track'.
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