Shareholders of the Steel Authority of India Ltd (SAIL) exercised their right of franchise on the scheme of amalgamation of the company’s wholly-owned subsidiary Indian Iron & Steel Co. Ltd (IISCO) with SAIL at an Extraordinary General Meeting (EGM) held for the purpose at the IAF auditorium in Subroto Park here this afternoon.
IISCO has an integrated steel plant at Burnpur in West Bengal and iron ore and coal mines/washeries in Jharkhand and Bengal. The main products of IISCO are structurals, bars & rods and pig iron.
Following the approval of the Government of India in June 2005, and subsequent clearance given by the Board of Industrial & Financial Reconstruction (BIFR), to the Ministry of Steel’s proposal for the amalgamation of IISCO with SAIL, the matter had been referred to the Ministry of Company Affairs (MoCA) for approval. The MoCA had directed SAIL to hold its shareholders’ meeting to obtain their consent to the proposed amalgamation under the provisions of Article 391-94 of the Companies Act, 1956. It had also nominated Mr V.S. Jain, Chairman, SAIL, as the chairman of the meeting of the company’s shareholders.
The outcome of the poll will be made public shortly, when the chairman submits his report to the MoCA.
IISCO had emerged from a long loss-making spell in 2003-04 by recording net profit of Rs. 27 crore. In 2004-05, the company declared a PAT of Rs. 46.6 crore on a turnover of Rs. 1,487 crore. The company has 16,218 employees on its rolls as on 1.4.05.
IISCO’s iron ore mines at Chiria in Jharkhand are rich in quality and quantity. Their strategic location would be advantageous for SAIL. Availability of large infrastructure facilities with IISCO will help expansion of capacity. Inter-plant synergy can be better exploited for improved and complementary product-mix. Moreover, IISCO has experienced manpower with good work culture. And SAIL has financial and managerial capabilities that can be pooled for faster growth of SAIL, including IISCO.
SAIL has recently approved a plan to invest around Rs. 8,000 crore for technological upgradation of IISCO, taking its annual hot metal production capacity to 2.5 million tonnes by 2011-12 from the present level of 0.85 million tonnes.