Delhi iron and steel producer Monnet Ispat & Energy (MIEL) has joined the race to acquire control of Orissa Sponge Iron & Steel (OSISL), which operates sponge iron and steel plants in Palaspanga, Orissa, the Economic Times reported.
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MIEL had previously bought a 5% stake in OSISL from the Infrastructure Development Finance Company. It has now acquired a further 10% stake in the company at Rs268.70 (US$5.21) per share, purchased directly from the promoter, Prashant Kumar Mohanty, and his two investment firms, Torsteel Research Foundation and TRFI Investment. MIEL has also announced it is ready to launch an open offer for a further 20% of OSISL.
MIEL joins two existing bidders in the battle for control of OSISL. In February, Sanjay Singhal, the promoter of Bhushan Power and Steel, announced an open offer to acquire 26% of the company at Rs300 per share (well above its current market price of Rs157). This followed an earlier bid from his brother, Neeraj Singhal, the managing director of Bhushan Steel. The brothers are estranged.
Neeraj Singhal purchased a 9.5% share in OSISL from Unitech, which brought his total holding to 14.8%. However, the Economic Times has reported that MIEL is likely to announce its open offer at a higher price than Sanjay Singhal’s.
Khaitan & Co is representing Torsteel Research Foundation and TRFI Investment in the ongoing negotiations.
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