Steel Exchange India Ltd has received approval from High Court at Hyderabad for Telangana and Andhra Pradesh for the amalgamation of Simhadri Power Ltd with the company with the effective date of merger as April 1, 2013.
Simhadri Power, a Vizag-based company, has a coal-based power plant generating 60 MW of power. Of this, 34 MW is used for captive purpose and the remaining is sold to the Andhra Pradesh grid. The power plant utilises waste heat from the kilns of sponge iron unit of SEIL generating about 16 MW of power from gases.
Besides this, it also utilises the coal fines generated by Steel Exchange India. The power plant paves the way for optimum use of resources thereby bringing down the cost of production substantially.
The amalgamation will not only help SEIL to compete better in the market with uninterrupted supply of power to its existing units but also provide reliable power to its expansion plans which will also enhance the scale of operations and thereby provide significant impetus to the growth of both the companies.
B Satish Kumar, Managing Director, Steel Exchange India, in a statement said, “This amalgamation will result in improved shareholder value by way of improved financial structure, cash flows, increased asset base, consolidated revenues and profitability. The amalgamation will also result in overall increase of our net worth. The asset base of the company will also increase substantially from Rs 324 crore to Rs 649 crore.”
With the amalgamation of Simhadri Power, SEIL now has a fully integrated steel manufacturing hub with the addition of the 60-MW captive power plant.