Mumbai: Mahindra Ugine Steel, said on Friday its board has approved a slump sale of its steel division to its new unit and agreed to rope in Sanyo Special Steel and Mitsui & Co as joint venture partners for the new unit.
Sanyo will invest Rs 1.11 billion in the JV with a 29% stake, Mitsui Rs 760 million for a 20% stake and the rest will be held by Mahindra Ugine, it said in an exchange filing, but did not provide the value of its own stake.
An employee inspects steel rolls at a steel plant. Photo: Bloomberg
“Mahindra Ugine is expected to drive general management, Sanyo will lead the manufacturing function while Mitsui will support the marketing function of the joint venture,” it said.
The JV will help Mahindra Ugine achieve improved productivity and enhance both cost and quality to international standards, the statement said.
Sanyo expects to strengthen its global growth expectations by having a share of the growing special steel demand in India from this JV, while Mitsui will strengthen its ties with its partner Mahindra Group, the statement added.
At 12:33 pm shares in Mahindra Ugine, valued by the market at $38 million, were 2.56% down to Rs 57.00, with volumes 13 times higher than its 30-day average, while the benchmark was down 1.25%.