SAIL, Posco closer to agreement on joint venture

21 Mar 2012

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Steel Authority of India Ltd (SAIL) and South Korean steel maker Posco have finalised almost all issues, except the shareholding structure, of their proposed joint venture for producing auto-grade steel.

State-run SAIL and Posco have proposed to invest around Rs16,000 crore in a joint venture plant at Bokaro that would produce 3 million tones of auto-grade steel a year.

''All issues have been frozen already and it is only the equity participation for which we are having a very positive and constructive dialogue,'' said SAIL chairman C S Verma.

However, shareholding in the proposed venture remained a vexed issue for the two with either seeking controlling rights.

Posco wants management control of the joint venture with 51 per cent stake while SAIL is agreeable to a 50:50 split of the capital.

SAIL, however, is hopeful of resolving all issues over the JV, which will use Posco's patented direct reduction Finex technology, an environment-friendly iron-making process.

''We are having talks on a very positive path. It should happen in due course,'' he said.

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