Rashtriya Ispat Nigam Ltd (RINL) took control of Bird Group of companies from Tuesday.
At a meeting on Monday, the Chairman-cum-Managing Director and the Director (Finance) of RINL were inducted on the board of the Bird Group's holding company – Eastern Investments Ltd (EIL).
Mr Dalip Singh, Joint Secretary, Ministry of Steel, told
Earlier, RINL, a PSE under the Steel Ministry, picked up 51 per cent in EIL, also under Ministry's administration, at a cost of Rs 316.30 crore.
Currently, 15.79 per cent stake in EIL is still held by the Government of India, while the balance is public holding.
Orissa Mineral Development Corporation (OMDC), a subsidiary of EIL and having mining rights to estimated 200 million tonnes iron ore and 44 million tonnes of manganese reserves, now has become an indirect or a step-down subsidiary of RINL.
Similarly, Bisra Stone Lime Company (BSLC), the other EIL subsidiary having limestone and dolomite resources, has turned an indirect subsidiary of RINL.
The CMD of RINL will now become the non-executive Chairman of EIL, OMDC and BSLC.
Under an agreed arrangement, one more director from RINL will have board berth on the three Bird Group companies.
Raw material linkages
Mr Singh said RINL would have to sign commercial agreements with each of the two EIL subsidiaries for raw material linkages.
“RINL will have the first right of refusal to the mining assets of OMDC and BSLC. But RINL will have to pay the market price for the minerals and not be able to enjoy the benefit of lower transfer price of the raw materials from captive mines,” said Mr Singh, who is on the boards of RINL as well as EIL, OMDC and BSLC.
All the Bird group mines are located in Orissa. Renewal of all six mining leases of OMDC and BSLC are, however, pending State Government clearances. “One of the six applications for renewal of iron ore concession is understood to be close to crossing the last approval hurdle. Rest are at various stages of processing,” the Steel Joint Secretary said.