Bhushan Power to launch open offer for Nova Iron on 13 Aug

Bhushan Power to launch open offer for Nova Iron on 13 Aug

Mumbai: Bhushan Power and Steel on Thursday said it would launch an open offer to acquire up to 20% additional stake in Nova Iron and Steel at a price of Rs14 per share on 13 August.

The offer will close on 29 August, said a public announcement issued by Master Capital Services, which is managing the offer on behalf of Bhushan Power and Steel (BPSL).

It said that BPSL is making an offer to the public shareholders of Nova Iron and Steel (NISL) to acquire up to 3,01,16,240 shares, representing 20% of the total outstanding voting equity share capital of NISL and will be payable in cash.

The offer will cost Bhushan Power and Steel about Rs42.16 crore, if accepted fully.

BPSL holds 61.94% stake in NISL. Of this, the company had acquired about 14.77% stake through open market transaction early this month and on 10 June, it entered into a share purchase agreement with NISL’s promoters to acquire additional 11.33% stake.

Nova Iron and Steel, the target company, has a 1.5 lakh tonne sponge iron unit in Bilaspur district, Chhattisgarh. It also provides product separation, screening, and storage facilities.

However, it does not have any iron ore mine and buys the raw material from the market, mainly from Orissa.

As on 31 February 2011, the company had a total income of Rs6.39 crore and had reported net loss of Rs4.60 crore, the public announcement said.

On the other hand, Bhushan Power and Steel has seven steel plants in Chandigarh, Derabassi, Kolkata and Orissa with a combined capacity of 2.3 million tonnes per annum. The company also has two non-coking coal blocks in Orissa and one coking coal block in Jharkhand.

The company, a listed entity, had reported a total income of Rs3,219.53 crore for the nine months period ended on 31 December 2011, and a net profit of Rs298.18 crore.

The shares of Nova Iron and Steel closed down by 2.35% at Rs14.12 apiece on the Bombay Stock Exchange.