Delhi-based Rathi Steel and Power has decided to hive off its plants in Ghaziabad and Odisha. Also, its CEO Udit Rathi has resigned following charges framed against the firm in a coal scam.
The demerger has been approved by the firm’s board to unlock the value of the plants, the company said in a filing to the stock exchanges.
The decision is subject to approval by stakeholders including lenders and concerned statutory authorities, it said.
Rathi resigned from the firm with effect from May 17, 2016. Early in May, a special court framed charges against Rathi Steel and Power and its three top officials including CEO, according to media reports.
The charges pertained to alleged irregularities in allocation of Kesla North coal block in Chhattisgarh to Rathi Steel and Power.
The company's Ghaziabad plant consists of steel rolling mills having an installed capacity of 125,000 TPA (tonnes per annum), a high speed no-twist block wire rod mill and steel melting shop with 40,000 TPA installed capacity, according to its website.
Its Odisha plant comprises facilities for manufacture of 150,000 TPA sponge iron, a steel melting shop of 1,50,000 TPA and captive power plant of 20 MW, implemented in first phase.
Shares of the firm ended at Rs 3.40 a piece, up 4.62% on the BSE in a weak Mumbai market.
Like this report? Sign up for our daily newsletter to get our top reports.