Bhuwalka Steel acquires Benaka Sponge Iron for Rs10 crore
17 Apr 2008
Mumbai: Bhuwalka Steel Industries Ltd has acquired Benaka Sponge Iron Pvt Ltd (BSIPL) for Rs10 crore in an all-cash deal.
The acquisition of 2.99 lakh equity shares in Benaka Sponge Iron (BSIPL) was made at a price of Rs334 per share, Bhuwalka said in a filling with the Bombay Stock Exchange.
Bhuwalka said the acquisition of the secondary steel producer would help it to make steel through primary route by integrating the operations and thereby improve margins.
Benaka owns a 60,000 tonnes per annum sponge iron plant and two kilns for coal-based sponge iron production, the company said in the filing.
The company is planning to generate power through hot gas recovery and proposes to enter into green power generation by setting up a 10-12 MW power plant with waste heat as feed stock along with chardust and coal.
BSIPL is strategically located in Bellary, having close proximity to iron ore belt yielding logistic advantage. The acquisition would enable the company to have backward integration and have synergy with its operations, it said.
BSIPL had posted a turnover of Rs40.21 crore and a profit after tax of Rs2.02 crore during 2006-07.
