NEW DELHI: The Alternative Mechanism, a ministerial group empowered by the Cabinet Committee on Economic Affairs (CCEA), has given green light to Konoike Transport Co. Ltd’s bid of Rs 320 crore for the full equity stake of MSTC Ltd in Ferro Scrap Nigam Limited (FSNL), finance ministry said Thursday in a statement.
The deal is in the final stages, with upcoming steps including issuance of Letter of Award, signing of share purchase agreement (SPA), and fulfilment of the conditions precedent outlined in the SPA by the involved parties before the transaction is officially closed. FSNL, 100% subsidiary of MSTC Ltd. under the Ministry of Steel, was established on March 28, 1979, to provide services to steel mills, specialising in recovery and processing of scrap from slag and refuse generated during iron and steel production across plants. The CCEA had granted approval for the strategic sale back in October 2016, outlining a two-stage auction process to identify a strategic buyer.
Following this, a bidding process was initiated, with professional advisers appointed to guide the transaction. The Preliminary Information Memorandum (PIM) was published on March 31, 2022, inviting expressions of interest. After a review, five bidders were shortlisted, with four of them obtaining security clearance from home ministry. Konoike’s bid of `320 crore exceeded this figure, outbidding alternative proposal from Indic Geo Resources Pvt. Ltd, a subsidiary of Chandan Steel Ltd.