Secondary steel firm Bhuwalka Steel Industries Ltd is divesting 51% stake in its UAE-based wholly owned subsidiary Bhuwalka Steel Industries (UAE) FZE to Dubai-based Lootah Group of Companies. Although it is customary for international firms to divest 51% stake in companies located in the Middle East, it marks yet another exposure of the Lootah group in a venture of an Indian company.
Earlier this year, Bhuwalka Steel Industries Ltd had disclosed its UAE arm had entered into a MoU with Lootah Group to meet capex and working capital requirements. It had said the proposed investment from Lootah would be done in such a way to make a 50:50 JV. "By entering into MoU, prospective investor will commence its financial and technical due diligence and could invest upto around 10 Million AED (UAE Dirhams)," it had said.
As per the deal, Lootah will support early completion of the project to make ferrous and non-ferrous metals besides meeting working capital needs and Bhuwalka would ensure technology, commissioning and running the plant.
The three-decade-old Bhuwalka Steel Industries makes steel rolled products in south India with plants in Bangalore, Kanchipuram and Mumbai. Its product range includes TMT bars, angles, channels, beams, flats, square, rounds, etc and generates turnover of around Rs 500 crore.
Lootah Group owned education and training centre Lootah Technical Centre (LTC) had early this year signed a MoU with South India-based manufacturer of electric two-wheelers Eko Vehicles to explore opportunities in commercially viable sustainable transport.
The UAE-based conglomerate that has among its notable ventures the world’s first Islamic bank - Dubai Islamic Bank (which later went public) had also struck agreements with Hyderabad-based IVRCL Infrastructures and Projects Limited to explore infrastructure development opportunities across India and the region. The group was also eyeing partnerships in the healthcare and hospitality business in India.
It had also announced plans to establish a development and operations centre at an IT park in Kerala for software development including CRM solutions besides addressing solutions for sectors such as engineering, construction, energy and environment.