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INDIA BUSINESS WORLD - May 2005
THE MONTH THAT WAS
MITTAL BROS BUY TURKISH STEEL FIRM FOR $78.4M
Global Steel Holdings (GSHL), a SPV controlled by Pramod and Vinod Mittal of Ispat Group, has acquired a Turkish electric arc furnace (EAF) steelmaker Izmir Demir Celik (IDC), which has a one million-tonne capacity, matching mills and associated infrastructure, including a captive port.
With the Turkish acquisition, GSHL and Ispat group, which has a presence in the Philippines, Nigeria, Bulgaria, Bosnia, Libya and India, will have a combined total steel making capacity of 15 million tonnes (including the Indian operations of the Ispat group).
About 75% of Izmir Demir Celik's products are exported. The company posted a net profit of 51.36 Turkish Lira (TL) or
. 29.5million for 2004, recovering from a TL 14.42 million or
. 8.28 million net loss in the previous year, GSHL sources said.
According to a statement issued to the Istanbul Stock Exchange, GSHL will pay $78.4 million for the stake in the company to Turkiye Is Bankasi, which is Turkey's largest non-state bank, which had put the stake on sale in June 2003 after regulators ordered Turkish banks to trim their industrial holdings.
GSHL sources said the acquisition will be completed by the end of May. The company's remaining shares are listed on the Istanbul stock exchange or held by private investors. Turkiye Is Bankasi signed the agreement with GSHL late last week.
Considerable interest has been generated in Turkey's steel industry with global majors like Mittal Steel and Arcelor already announcing their interest in the largest Turkish steel mill Eregli Demir & Celik Fabrikalari AS.
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