Valuation of Indian iron ore assets of Stemcor falls - Report
Financial Express reported that Stemcor India, which had put up its assets in India for sale since September, has seen its valuations tumble to almost 50% of what was earlier quoted when the asset was first put on the block.
According to sources in companies currently looking at buying the assets, their current value is being pegged at not more than INR 3,500 to 4,000 crore or roughly in the range of USD 600 million, against an earlier estimated figure of USD 1 to 1.2 billion.
This is a downward revision since September 2013 and ushers in better negotiation power for companies like JSW Steel, Jindal Steel and Power, Essel Mining of the Aditya Birla Group, Essar Steel and Visa Steel.
In fact, with the interested bidders now progressing with their due diligence of the 2 main assets of Stemcor India and their accounts, startling revelations have come out forcing the interested companies to look at Stemcor India as not an out an out attractive buyout.
This has been accentuated with the Justice MB Shah Commission’s debilitating report released on December 26th accusing most of the mining companies in Orissa of being involved in illegal mining.
The Commission report had said that all 55 mines around the Baitarni river and its tributaries should not be allowed to operate till the time their environmental approvals are revisited.
A top official in the Orissa government’s mining department, while refusing to divulge any more information said that “Almost all major companies are part of the Baitarni river iron ore belt and Aryan Mining is one of them.”
Aryan Mining, which is the shining jewel in Stemcor India’s crown, is also embroiled in litigations apart from the allegations of the Commission report. In 2012 to 13, the company had to keep its operations shut for almost 7 months as the state government had initiated investigation of various statutory compliance being carried out by the mining department.
(www.steelguru.com)
Thursday, January 9, 2014
Valuation of Indian iron ore
0 comments:
Post a Comment