Monnet enters race for Orissa Sponge; agrees to buy 27 per cent

25 February 2009

Monnet Ispat has entered into an agreement with the promoter firms of Orissa Sponge Iron & Steel, TRFI Investments and the Torsteel Research Foundation of India, to acquire about 27 per cent stake in the company.

The acquisition is being made through another group firm, Mounteverest Trading & Investment (MTIL), which has entered into a share purchase agreement with the two promoter firms of Orissa Sponge.

Monnet Ispat will buy 54.20 lakh equity shares in the Orissa-based secondary steel producer for an estimated value of Rs148 crore. MTIL said it would follow up with an open offer to the shareholders of Orissa Sponge.

The two promoter firms hold about 34 per cent stake in OSISL.

"Since Orissa Sponge is a listed company, the agreement makes it necessary for MTIL to make an announcement to the public inviting competitive bid from the shareholders of OSISL," Monnet Ispat said in a filing with the Bombay Stock Exchange (BSE).

Earlier, the Bhushan brothers were vying with each other to buy into Orissa Sponge, which has a vast product portfolio and huge raw material reserves.