SAIL has merged Maharashtra Elektrosmelt (MEL) with itself and has planned a fresh capital infusion of over Rs 1,400 crore in expanding the capacity of the ferro-alloy maker.
According to the merger swap ratio, shareholders of MEL would get one share of SAIL for every 1.7 shares of MEL held. SAIL received the approval from the Ministry of Corporate Affairs last month.
SAIL owns 99.12 per cent stake in MEL, which produces about one lakh tonnes of manganese-based ferro alloys at its plant in Chandrapur, Maharashtra.
SAIL plans to set up an additional ferro-manganese plant at a cost of Rs 200 crore. It also plans to set up 4-MW power plant at a cost of Rs 36 crore, using gases as a by-product from the proposed plant.
“SAIL is also exploring the possibility of setting up a captive power plant of suitable capacity through the joint venture route within the MEL plant area in order to produce cost-effective ferro-alloys. Investment for this project is expected to be around Rs 1,200 crore,” the company statement said.