ANC Holdings LLC, the Dubai based conglomerate with business interests in construction, foods, education, trading, hospitality, process and real estate, has acquired a 10 per cent stake in troubled India Steel Works Limited (ISWL) in an all-cash deal worth Rs 190 million.
This is the company’s second biggest acquisition in a month, among a series of others announced this year.
ANC Holdings also plans to expand its shareholding in the Mumbai-based steel company within a year, to improve its prospects, an official told Indian media.
“We will definitely look forward to buying more stake in ISWL. Probably, in a year’s span, we’ll purchase more equity and also ensure that the company expands capacity,” Mahesh K Sheregar, a director with ANC Holdings was quoted by Economic Times. Sheregar has already joined the ISWL board.
India Steel Works makes stainless steel products and had earlier been referred to the Corporate Debt Restructuring cell for its inability to repay its debt. The company currently has debt worth nearly Rs 70 crore which it expects to repay in the near future, the paper said.
“We are close to clearing all our debts which will help us to raise loans in the future. This deal will help us repay creditors and to fund the voluntary retirement scheme for workers at one of ISWL’s factories,” said Ashwin Gupta, managing director at India Steel Works.
Post the deal, the promoter’s holding in ISW has come down to 48 per cent, from the existing 55 per cent. The company too wants to increase equity sale in the company to ANC Holdings.
As part of the deal, ISWL will process material from ANC’s Dubai steel plant in ISWL’s factories located in Maharashtra, India. ANC Holdings had recently acquired stainless steel manufacturer, International Quality Steel, in Dubai.
India Steel Works had a net loss of Rs 120 million the previous fiscal. Shares of India Steel Works closed 2 per cent down to Rs 5, in a weak Bombay Stock Exchange.
ANC Holdings last month announced the strategic acquisition of a majority stake in Amusement Whitewater LLC (AWW), the regional leader in design, supply and execution of themed environments. AWW are the creators of The Lost Chambers, Atlantis, and the complete internal alpine theming of Ski Dubai.
Source: Gulf News