The Hindu Business Line : Ispat mulls merger of Singapore arm

ISPAT Industries is planning to merge its wholly-owned subsidiary Nippon Ispat Singapore (Pte) Ltd with itself. The company is near defunct for last few years and is currently making losses. The merger proposal will be formalised this fiscal.

Ispat had previously decided to merge Ispat Metallics (India) Ltd with itself as part of the corporate debt restructuring (CDR) scheme. The merger will be effected during the current fiscal.

Explaining the rationale behind the proposed merger of Nippon Singapore, the Chairman and Managing Director of Ispat Industries, Mr Pramod Mittal, said that the subsidiary was created to act as an export arm of the company in the Asian markets. "However, as we are now directly marketing our products overseas through sales offices Nippon Ispat has lost its relevance. It will now be merged with the parent".

Apart from Singapore, Ispat has already opened its sales offices in Beijing and Dubai. Having registered more than Rs 790 crore export turnover during the last two years, the company expects to cross the Rs 1,000 crore export mark in 2004-05.

According to the latest annual report of Ispat, the Singapore-based subsidiary registered a loss of S$56,325 in 2003-04, against S$11048 in 2002-03. The loss was largely attributed to "foreign currency exchange adjustment loss" amounting to S$50912 in 2003-04, against S$5582 in the previous year. There was no trading income during the period. Correspondingly, there was no income tax payable either.

Ispat Energy to go on stream in 2005

Mr Pramod Mittal expects Ispat Energy to be commissioned by 2005. Having already undergone a project revision, the company was scheduled to set up a 2X55 MW captive generation unit based on blast furnace gas at the Ispat's existing complex in Dolvy. The Rs 350-crore project was scheduled for financial closure last year.

Mr Mittal said the company was expected to tie up funds for Ispat Energy during the current year.

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