SAIL moots joint war-chest for acquisitions abroad
19 May 2010
State-owned Steel Authority of India Ltd (SAIL) today floated the idea of combining the resources of all steel industry players to create a "war chest" for "big ticket" buyouts of resources abroad.
"There are four or five big players in the domestic steel industry. Now if they can come together to create a war chest we can go for big ticket acquisition of resources which are not available in the country. In the long-run, it is in the interest of the industry," SAIL chairman S K Roongta said at a FICCI-organised steel summit in New Delhi.
Roongta, who is also the head of the special purpose vehicle created by the government for such acquisitions, called International Coal Ventures Ltd (ICVL), said that steel firms should optimise the use of vital steel making inputs iron ore and coking coal.
ICVL, a consortium comprising top public sector undertakings National Thermal Power Corp, SAIL, Coal India Ltd, NMDC and RINL, has not, since its inception in 2008, met with any success in acquiring coking coal assets abroad.
Private steel firms too are scouting for such resources in countries like South Africa, Indonesia and Australia among others to reduce their dependence on expensive imports and cut their input cost.
Essar Steel business group chief executive Malay Mukherjee, who was also present on the occasion, said the company is keenly looking at merger and acquisition opportunities overseas.
