Bhubaneswar-based steel manufacturing company VISA Steel Ltd has formed a coke-making joint venture with SunCoke Energy Inc. of the US and is selling 49 per cent stake in the JV to NYSE-listed SunCoke for Rs 368 crore ($67.01 million), according to a BSE filing.
“VISA Steel will hold the remaining 51 per cent stake and the joint venture will comprise VISA Steel’s existing 400,000 MT per annum heat recovery coke plant and associated steam generation units at Kalinganagar in Orissa. The transaction is expected to close in the first quarter of 2013, subject to customary conditions, including approval from VISA Steel shareholders,” a company said in the statement.
VISA Steel is a subsidiary of VISA Infrastructure Ltd. The firm has transferred the business of manufacturing and sale of metallurgical coke at Kalinganagar by way of slump sale on a going concern basis to its subsidiary VISA Coke Ltd.
“The demand for coke from large and medium size steel producers has been increasing substantially and there is a potential to grow the coke business on a standalone basis,” said Vishambhar Saran, chairman of VISA Steel.
VISA Steel also holds 65 per cent stake in VISA BAO Ltd (remaining 35 per cent is with China’s Baosteel) and 89 per cent in Ghotaringa Minerals Ltd (remaining 11 per cent with Odisha Industries Ltd), its other two subsidiaries.
With around 50 years of experience, SunCoke manufactures metallurgical coke and has facilities in Virginia, Indiana, Ohio, Illinois and Vitoria (Brazil). It also has coal mining operations, with more than 114 million tonnes of proven and probable reserves located in Virginia and West Virginia.
“We are pleased to partner with VISA Steel, a company with strong leadership in the steel and coke industry, to grow our international footprint and establish a coke-making presence in India,” said Fritz Henderson, chairman and CEO of SunCoke.
Last June, SunCoke also signed a definitive agreement with Kolkata-based Global Coke Ltd for 26 per cent stake for $30 million.
(Edited by Sanghamitra Mandal)