Ruling out privatization, India’s Ministry of Steel has proposed the sale of minority shares to a strategic investor to revive Salem Steel Plant (SSP), a wholly-owned subsidiary of Steel Authority of India Limited (SAIL), an Indian government official said on Wednesday, October 5.
The official said that, since a majority equity sale of above 51 percent is facing political opposition from various quarters, the ministry is proposing selling off minority equity (less than 51 percent) in SSP to a strategic partner with the parent company SAIL maintaining a majority equity holding in the steel mill.
SSP, with a steel mill located in the southern Indian state of Tamil Nadu, has an annual production capacity of 66,600 mt of cold rolled stainless steel flat products and 272,000 mt of hot rolled stainless steel flat products.
For the record, this will be the second attempt by the Indian government to hive off SSP into a separate joint venture. In 2003, the government had invited bids for 51 percent equity in SSP for which Tata Steel and Jindal Strips submitted bids but a deal failed to materialize over differences on valuation.
According to the government official, any proposed new minority joint venture partner for SSP will be offered opportunities to develop the 2,500 acres of vacant land available to SSP.