Bhuwalka Steel takes stake in Bellary based BSIPL

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Mumbai, Apr 17 (UNI) Bhuwalka Steel Industries Ltd has acquired 2.99 lakh equity shares of Bellary-based Benaka Sponge Iron Pvt Ltd (BSIPL) in an all cash deal of Rs 10.02 crore.

The Rs 100 share was acquird at Rs 334 per share, the Company said in a release here today.

BSIPL is strategically, located in Belagal Village, Bellary, having proximity to iron ore belt yielding logistic advantage.

The acquisition would enable the Company to have backward integration and have synergy with the operations of the Company.

BSIPL is an existing, profit making Company and its net worth as on March 31, 2007 was Rs 10.02 crores as per the audited balance sheet. BSIPL posted a turnover of Rs 40.21 crores with a PAT of Rs 2.02 crores during 2006-07 and it is estimated to post a turnover of Rs 59 crores with a PAT of about Rs 2.80 crores for the year 2007-08.

Benaka has at present two Kilns of coal-based sponge iron plant of the capacity of 100 tonne per day each. With this takeover, the Company would have access to sponge iron to the tune of 60,000 MT p.a.

In next phase, the Company was planning to generate power through hot gas recovery for captive consumption by the group.

Company was planning to enter into green power generation by setting up a power plant with a capacity of 10-12 MW with waste heat as feed stock along with chardust (by-product) and coal.

Presently, Bhuwalka Steel Industries Ltd is a secondary steel producer and this acquisition would enable the Group to produce steel through primary route by integrating the operations to improve margins. Company would have linkage for the coal and iron ore, the major raw materials, to substantially improve the profitability in the current year.

UNI VK DB SM1503

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