Tatas, Essar among 5 global steel makers still in fray for Indonesia's Krakatau Steel

27 May 2008

Indonesia's state-owned Krakatau Steel is one lucky bride, considering it has five highly eligible suitors – ArcelorMittal, Tata Steel, Essar Steel, BlueScope Steel and Posco - lining up for its hand.

While the first three have obvious India connections (although ArcelorMittal has its headquarters in Luxemborg), BlueScope is an Australian company, which has a joint venture with Tata Steel and Posco hails from South Korea. However, the latest news says that the last-named has denied official interest in the stake sale.

Ansari Bukhari, director general for metal, machinery and textiles in Indonesia, had said that the first four, namely ArcelorMittal, Tata Steel, Essar Steel and BlueScope had evinced interest, while Enterprises Minister Sofyan Djalil had mentioned Posco's name.

However, yesterday, the Korean company  said, ''The Indonesian government has not announced details of a privatisation plan for the company yet and we have not expressed interest in the company''.

Krakatau Steel produces 2.5 million tonne per year and is valued at $1.2 billion. So, effectively, a 40-per cent stake, which the Indonesian government is reportedly interested to sell, will cost around half a billion dollars.

"Tata Steel's CEO Indranil Sengupta had earlier planned to meet with minister of industry Fahmi Idris sometime on 5 or 6 May. He has some questions on the government's plan to privatise Krakatau Steel," Bukhari had at the beginning of this month.