¬†The battle to take control of Orissa Sponge, currently promoted by the Mohanty family, has revived after a gap of three years with Bhushan Steel, promoted by Brij Bhushan Singal and Neeraj Singal, once again making their open offer to acquire up to 20% additional stake at a price of Rs 360 a share.
Two other companies are in the fray, Monnet Ispat with an offer of Rs 310 a share and Sanjay Singhal’s Bhushan Power which has made an offer of Rs 300 per share.
However, the open offers are pegged at prices announced in 2009, soon after which the matter went to court, with the promoters of Orissa Sponge alleging that Bhushan Steel had violated certain takeover regulations. Last month a Supreme Court order allowed Bhsuhan Steel to revive the offer.
Bhushan Steel owns about 17% in Orissa Sponge, while Monnet Ispat holds 15%. About 30% is with the promoters. The latter have aligned with Monnet in the ongoing dispute.
Both companies see the acquisition as a means of expanding in the region, with Bhushan Steel also hoping to leverage its synergies with the unit, should it be successful.
Orissa Sponge Iron was the first commercial coal-based sponge iron plant in India in the Keonjhar district of Orissa. It has a manufacturing capacity of 2,50,000 tonnes of sponge iron. The company posted a revenue of Rs 38 crore in the year ended March 2012 and a loss of Rs 18.3 crore.