Chhattisgarh-based steel producer Godawari Power & Ispat (GPIL) has decided in favour of a strategic stake sale in subsidiary Ardent Steel Limited which has pellet manufacturing capacity of 0.6 mn t per annum.
GPIL, a Hira Group company, had decided to sell 42% stake in Ardent Steel to Transtek Coal & Minerals Pvt. Ltd. for a cash consideration of INR 95 crore, company sources divulged.
GPIL will continue to hold 38% stake in Ardent Steel as well as management control, company sources confirmed, adding that the deal puts Ardent Steel at an equity value of INR 2.6 bn.
As per GPIL sources, the rationale for the stake sale is that the deal will enable Ardent Steel to secure long-term iron ore security with the help of a strong local partner at a time when iron ore shortage has emerged as a pressing concern after the Odisha auctions earlier this year.
Credited with considerable experience in iron ore sourcing, Transtek has been engaged in trading of iron ore and other minerals in Odisha for over a decade.
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