The Hindu Business Line : Jindal South to buy controlling stake in Siscol

THE Jindal South West Group is set to acquire a controlling stake in the Southern Iron & Steel Company Ltd (Siscol), promoted by the Coimbatore-based Lakshmi Machine Works (LMW) group, according to sources in the know.

Siscol has informed the stock exchange that the lending institutions and banks headed by ICICI Bank Ltd have framed a corporate debt restructure package that envisages transfer of 300-lakh shares of Lakshmi Machine Works Ltd in Siscol to Jindal South West Group.

Siscol is a Rs 1,035-crore integrated steel mill located near Salem with a capacity to produce 3,00,000 tonne of rolled products - bars and rods, annually.

It is promoted by LMW, which holds a 39 per cent stake, and the Tamil Nadu Industrial Development Corporation, which holds 11 per cent stake in the equity. The public holds a 46.74 per cent stake and private corporate bodies 2.13 per cent.

Under the scheme, over Rs 395 crore of debt will be converted to optional convertible instruments at a substantial premium once the Jindal group acquires the controlling stake, they said.

The sources said that the restructure package envisages doubling of the production capacity and strengthening of production facilities to improve viability of the unit by the strategic investor.

Also, additional investments of Rs 400 crore will be made with the existing lenders providing Rs 200-crore assistance and the Jindal South West group bringing in the balance through equity and loans.

This will be to set up a 4-lakh tonne coke oven plant and a 50-MW cogeneration power plant using the coke oven gases.

The coke oven plant will generate enough coke to meet its existing requirement of 1.5 lakh tonnes of coke a year, and also the proposed expanded capacity, they said.

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