State-run MSTC has signed a share purchase agreement with Japan’s Konoike Transport for the strategic disinvestment of its arm Ferro Scrap Nigam for ₹320 crore, the Department of Investment and Public Asset Management said on Thursday.
Last month, the government approved the sale of Ferro Scrap Nigam to Konoike.
“The transaction now moves to the concluding stage,” the department said in a post on X (formerly Twitter).
Konoike’s bid had beat the reserve price of ₹262 crore for the Chhattisgarh-based company, firmed up through independent valuations. The other bidder was Indic Geo Resources, a subsidiary of Chandan Steel.
The Alternative Mechanism-comprising road transport minister Nitin Gadkari, finance minister Nirmala Sitharaman and steel minister HD Kumaraswamy-had approved the sale of a 100% equity of MSTC in Ferro Scrap Nigam along with the transfer of management control, the finance ministry had said.
Ferro Scrap Nigam’s profit after tax had tripled to ₹22.64 crore in the June quarter, against ₹7.26 crore a year before.
The company, which comes under the steel ministry, was incorporated in 1979 to provide steel mill services. It specialises in the recovery and processing of scrap from slag and refuge generated during the iron and steel making across plants.
In October 2016, the Cabinet Committee on Economic Affairs (CCEA) had granted in-principle approval for this strategic sale under which the buyer was to be identified through a two-stage auction process.
Source: Economic Times