Gujarat NRE Coke, FCGL merger to augment cash flow: Jagatramka

Ahmedabad, Mar 16 (UNI) The merger of Gujarat NRE Coke Ltd (GNCL) and its cash-rich sister concern FCGL Industries would help the two companies garner more cash flow and reserves to increase production at their coalfields in Australia, said GNCL Vice-Chairman and Managing Director Arun Kumar Jagatramka.

Explaining the basis of the strategic move, Mr Jagatramka said that while GNCL is the country's largest non-captive manufacturer of low-ash metallurgical coke, FCGL is in the business of financial management, investment and leasing.

The merger issue is scheduled to be discussed at the extra-ordinary general meetings of both the companies on March 22, 2006. It has already been approved by the board of governors of both the companies in December last year.

In pursuant to the Calcutta High Court order of February 23, both the companies have informed the Stock Exchange and all the shareholders about the EGMs, alongwith the Scheme of Amalgamation.

They have also informed CSE about the proposed 1:1 share swap ratio between the two raising more capital but not exceeding 100 million dollar through ADR, FCCB and or GDR.

Kolkata-based GNCL has been a profit making organization since its inception in 1986 as it has recently forayed into steel manufacturing, setting up a mid-size greenfield plant near Bhachau in Kutch district at a cost of Rs 50-crore.

The plant is at present producing 300,000 tonnes per annum (tpa) of billets, blooms, ingots and hot rolled steel from MS Scrap, Sponge iron, Ferro Alloys and CI Scrap as it is to be gradually raised to 1.0 million tpa.

It is also in the process of setting up a captive power plant of 20 MW, using the waste heat generated by coke oven plant thereby saving in power cost. It has also set up a 25 MW wind farm in Kutch itself to provide cheap green power to the steel plant.

Besides Australia, he said, the company is exploring acquiring mining projects in Peru and Chile which for sustained growth in the future.

GNCL's coke manufacturing facility at Jamnagar at present produces about 2 lakh tpa of low-ash metallurgical coke.

UNI VKC ARB DS1115