The Hindu Business Line : Ruia group to buy out another Orissa PSU

The Orissa Government has recently cleared a proposal from the Group for acquiring a controlling stake in IDCOL Rolling Mills Ltd (IRML), a State PSU, at Hirakud in Orissa.

The mill, with a capacity to manufacture 25,000 tonnes of rolled products including torque steel, angle, flat and rounds has been closed since August 1998. The acquisition will provide backward integration for Jessop's business activities. Having been set up in 1968, IRML was earlier an unit of the State undertaking Industrial Development Corporation of Orissa Ltd (IDCOL) and was converted into a wholly owned subsidiary in 2002.

The unit was put on the block for disinvestment in 2003.

This is the second time in the last couple of months that the Orissa Government has decided to disinvest sick PSUs to the Ruia group.

In April this year, the group was allowed to acquire Hirakud Cables, a sick aluminium conductor wire and transmission tower manufacturing PSU. However, the acquisition has been delayed due to court cases, including one filed by an employees union, pending at the Orissa High Court.

Confirming the development, the Ruia Group Chairman, Mr Pawan Ruia, said that the total acquisition cost of IRML was close to Rs 7 crore including the bid price of Rs 1.11 crore and other financial liabilities. The Group has also taken over the liability of the existing 25 employees in IRML.

"We have received an order from the Orissa Government favouring the proposed acquisition this week. We expect to take over the company in next couple of weeks."

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