“Considering the varied product mix, selling the units individually will be a more financially viable proposition than projecting Burn Standard as one company for disinvestment,” a top official of Burn Standard told The Financial Express.
In the current economic scenario, he said, it will be almost impossible to get a buyer with the varied interests of Burn Standard. “Even if we are able to get one such buyer, the offer will not be as lucrative as it would have been in case we sell off three individual units to three individual buyers,” he said.
The official said bids inviting expressions of interest (EoIs) will be floated only after UTI Bank submits its valuation of the Burn Standard property. UTI Bank, the operating agency for the valuation, is already running behind schedule.
“UTI Bank was originally expected to submit its report by June 2002, but had to postpone it because of difficulties in data collection,” he said. The report is now expected next month, and the EoIs will be floated in September. The wagon- cum- foundry unit at Howrah is expected to attract the highest bid, since it has been modernised recently and has the smallest workforce.
“The management has been able to bring down the staff strength at Howrah to 250 from 3,000 through voluntary retirement schemes in three phases,” he said. Industry sources said HDC Ltd is eyeing the unit, since it is in the same business and has a foundry at Dankuni. Other prospective buyers are Besco Ltd and Titagarh Steel.
The refractory unit at Salem is expected to fetch the next highest bid. Although the refractory industry is in a recession, the unit has been modernised and can now meet the needs of the glass and cement industries apart from steel. Salem’s staff strength has also been reduced, to 760 from 1,300, through a VRS. Getting a buyer for the Burnpur unit could be a problem, since it has a huge workforce of 1,300.