Usha Martin mulls sale of steel business to pare debt
In a bid to reduce debt, Usha Martin has decided to sell its steel business. In this regard, the board reconstituted the committee of independent directors of the company to appoint investment banks, consultants and advisors to help evaluate proposals and oversee the process of sale of the steel business. The company has a debt of around Rs. 5,000 crore.
Previously, the company was planning to sell its wire and wire rope business, but the change in the market condition has made them think twice and opt for selling the steel business. Usually, the sale of business can be undertaken by the company only after obtaining approvals from the board, regulators, shareholders and lenders.
The two steel biggies Tata Steel and Jsw Steel have shown their interest in the steel business, however its yet to be expressed officially.
Steel business contributes a profit before tax of Rs 99 cr where as the wire and wire rope business contributes Rs. 209 crore profits which states that the wire business is more profitable than the steel.
On Tuesdays the stock has opened at Rs.32.30 and touched a high/low of Rs.33/Rs.30.80 respectively and is currently quoting at Rs.31.15 per share.