Bhuwalka Steel - Acquisition of shares of Benaka Sponge Iron Pvt Ltd
Bhuwalka Steel Industries Ltd has informed BSE that the Company has taken over 299900 nos equity shares of Rs 100/- each @ Rs 334/- per share in Benaka Sponge Iron Pvt. Ltd, Bellary (BSIPL) by way of all cash deal of INR Rs 10.02 Crores. BSIPL is strategically, located in Belagal Village, Bellary, having proximity to iron ore belt yielding logistic advantage. The acquisition will enable the Company to have backward integration and have synergy with the operations of the Company. BSIPL is an existing, profit making Company and its net worth as on March 31, 2007 was Rs 10.02 Crores as per the audited balance sheet. BSIPL posted a turnover of Rs 40.21 Crores with a PAT of Rs 2.02 Crores during 2006-07 and it is estimated to post a turnover of Rs 59 Crores with a PAT of about Rs 2.80 Crores for the year 2007-08.
Benaka has at present 2 Kilns of coal based sponge iron plant of the capacity of 100 MT per day each. With this takeover, the Company will have access to sponge iron to the tune of 60,000 MT p.a. In next phase, the Company is planning to generate power through hot gas recovery for captive consumption by the group. Company is planning to enter into green power generation by setting up a power plant with a capacity of 10-12 MW with waste heat as feed stock along with chardust (by-product) and coal.
Presently, Bhuwalka Steel Industries Ltd is a secondary steel producer and this acquisition will enable the Group to produce steel through primary route by integrating the operations to improve, margins. Company will have linkage for the coal and iron ore, the major raw materials, to substantially improve the profitability in the Current year.
Tags: Bhuwalka Steel