According to the terms set by SAIL, to be eligible to participate in the invitation of 'expression of interest' (EOI), the interested party should have, individually or jointly, an annual turnover of over Rs 5 billion in any of the past three years. Official sources here told IANS that if the interested party happens to be a new company formed specifically for this purpose, the eligibility criteria would apply to the promoters.

SAIL had appointed the Industrial Development Bank of India (IDBI) as its global adviser for this disinvestment process to a suitable strategic partner, who may bring in requisite expertise and resources for achieving viable operations. The sources said the strategic partner would be selected on the basis of evaluation criteria to be finalised by SAIL, which may include financial soundness and track record with capabilities of bringing in the requisite funds and capability to market the manufactured range of products in India and abroad.

The new partner would also have to required capability of providing technical and management expertise, considering taking over of the majority stake and plans for dealing with and servicing the existing liabilities of Iisco, which at present has about 25,000 employees.

Sources said both domestic and overseas companies, whether currently existing or to be formed specifically to participate in disinvestment process of SAIL's shareholding in Iisco, could submit their proposals. Iisco was incorporated in 1928 and was taken over by the government through an ordinance in September 1972. Later, all its shares were transferred to Sail.

The existing equity capital of Iisco as of March 31, 1999, was Rs 3.8 billion, comprising 387.7 million equity shares of Rs 10 each. Iisco has an integrated facility for manufacture of iron and steel with its principal unit located at Burnpur, West Bengal, about 200 km from Calcutta.

It has facilities for producing a wide range of structural, light and heavy rails, bars and rods, besides rolling special section like Z piling, Z bars and colliery arches. The company has its own captive resources for mining of major raw materials like iron ore and coking coal with two iron ore mines located at Gua and Chiria in Bihar.

The Chiria iron deposit is the largest in India, estimated at around two billion tonnes with an indicating ferrous content of 62 per cent. Iisco was declared a sick company by the Board of Industrial and Financial Reconstruction (BIFR) under the Sick Industrial Companies (Special Provisions) Act in 1994 and since then Sail has been on the lookout for a majority stake buyer.

It had earlier signed a deal with a Russian company named Tyazpromexport (TPE) for modernisation of the plant, but after a long wait, the Russian firm failed to keep its commitment. Till January the company was expected to participate in the modernisation of Iisco.

The Sail subsidiary owed Rs 19.4 billion to the parent company as of April 1, 1999, which was, however, written off following approval of a financial restructuring proposal by the Central government last month. Both SAIL and the government have ruled out any more doles to keep Iisco going.

-- (India Abroad News Service)