The Hindu Business Line : IISCO gets BIFR nod for sale of surplus assets

THE Board for Industrial and Financial Reconstruction (BIFR) has given its nod to the Indian Iron and Steel Company (IISCO), a subsidiary of Steel Authority of India Ltd (SAIL), for sale of its surplus assets.

At a recent hearing, the bench noted that based on recommendations of the asset sale committee (ASC) and the board of directors of the company, IISCO has requested the board for approval of sale of the sheet mill equipment lying at its Burnpur Steel Works plant in West Bengal.

"On consideration of the case, the bench approves the recommendations of ASC for sale of the sheet mill equipment to the highest bidder, at the price approved by the ASC (Rs 6.51 crore)," the order said.

To part-finance the rehabilitation cost of the company, the sanctioned scheme with cut-off date as April 1, 2003 inter alia envisaged sale of the company's surplus or redundant assets, through an ASC as per the BIFR guidelines, the bench observed.

IISCO in June 2004 informed the board that an ASC was constituted by IDBI, the operating agency.

In its meeting held in May 2004, ASC has recommended the sale of the company's surplus sheet mill equipment, the bench noted.

The company further informed that the board of directors of IISCO has also approved the sale of these assets to the highest bidder.

In November 2003, the bench had sanctioned an Rs 881-crore revival scheme.

The company needed funds to the tune of Rs 210 crore for meeting the projected cash losses aggregating Rs 54 crore in the first two years, proposed rationalisation of its excess current liabilities and payment of statutory dues aggregating XP 144 crore, and for meeting long-term margin money requirements of working capital estimated at Rs 12 crore. The fund was to be raised through the proceeds from sale on non-core assets and market borrowings.

IISCO engaged in manufacture of pig iron, steel, ferrous and non-ferrous castings, and spun pipes was incorporated in 1918 in the private sector.

The company has a steel plant at Burnpur, captive iron ore mines at Gua and Chiria in Jharkhand. It has captive collieries at Chasnalla and Jitpur in Jharkhand and Ramnagore in West Bengal, a foundry and spun pipe-making plant at Kulti, West Bengal and a nationwide marketing set up.

IISCO was taken over by the Government of India in 1972. The company was nationalised in 1976 and made subsidiary of SAIL.

The bench, while sanctioning a revival scheme for the company had noted that its performance was unsatisfactory mainly due to old plant and machinery, obsolete technology and lack of necessary capital inputs.

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