The Department of Investment and Public Asset Management (DIPAM), on Thursday, sought expression of interest (EoI) for strategic disinvestment in Ferro Scrap Nigam Limited (FSNL), a 100 per cent subsidiary of MSTC.

The EoI was floated today, with the last date for submission being May 5. Physical copies of the bid will have to be submitted by May 12. BDO India LLP has been appointed as transaction advisor.

Incorporated in 1979, FSNL is a subsidiary of MSTC, and is a specialised steel mill service provider engaged in scrap processing for steel millss. It offers services for dig and haul of blast furnaces and steel melting shop slag at slag yards, processing of iron and steel skulls, mill rejects and maintenance scrap as per the specific requirements of customers.

The Cabinet Committee on Economic Affairs (CCEA) had in October 2016 given an in-principle approval to divest the Centre’s entire stake in FSNL (held through MSTC).

Financials

It reported a profit after tax of ₹22.75 crore in FY21 against a revenue of ₹364.97 crore. The divestment is expected to be completed by FY23.

FSNL also undertakes scarfing of metal slabs, crushing and screening of slag to be used in sinter plant, blast furnace, steel melting shop and rail ballast. It removes sludge and ash deposit from sludge compartments and ash ponds. It handles and neutralises acid sludge in open hearth muck dump.

Based on the evaluation of EoIs, shortlisted bidders will be provided with request for proposal (RFP), including draft share purchase agreement and access to the data room to review documents of the PSU to conduct due diligence.

The shortlisted bidder, approved by the CCEA will be designated the successful bidder.

The winning bidder will have to undertake some obligations regarding employee protection, business continuity, asset stripping, lock-in of the shares and so on. These obligations would be specified at the RFP stage.

The company had a manpower of 1,451, out of which 590 are regular employees and 861 outsourced as on November 1, 2021.

FSNL has an authorised capital ₹50 crore as on March 31, 2021, and paid-up share capital of ₹32 crore. The entire paid-up capital is held by MSTC.

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