ICCL merges with IMFA
Oct 25, 2006
The Statesman

The merger of Indian Charge Chrome Ltd. with Indian Metals & Ferro Alloys Ltd was formally announced today by Mr Subhrakant Panda, the MD of IMFA Group, who claimed that it was done to fully capture operational and financial synergies and position the company to aggressively move forward with future plans and investment.

The fact remains that both had a common management and there was a lot of interplay between the two in terms of sharing ore and power. ICCL was riddled with debt, while IMFA was a debt-free company. The debt of the new merged entity, which is to be known as IMFA, is now around Rs 560 crore, entirely that of ICCL.

Mr Panda said the net worth of the merged company is Rs.124 crore and the projected turnover in financial year 2007 would be Rs 500 crore. The promoter shareholding is 57 per cent with the rest being held by the financial institutions and the public.

The merger is in fact the culmination of the restructuring package of ICCL and part of the stipulation by term lenders of the company.

An integral part of the merger scheme was the formation of an independent trust which will hold four per cent of the post-merger equity of IMFA to be distributed to small shareholders at a minimum discount of 50 per cent to the market price, said Mr Panda, while insisting that interest of small shareholders stand protected. In fact, the merger was a unanimous decision of the board of IMFA, while it was supported by more than 99 per cent of Board of ICCL, he said.

Talking of his future plans, Mr Panda said the focus would be to become an independent power generator, besides expanding ferro chrome production. "We plan to invest Rs 700 crore over the next three years to increase our ferro alloys capacity from the present 2,35,000 tons to 3,50,000 tons per anum. The company is also looking at the power generation side with a 30 MW dual fuel power plant and a 120 MW coal-based power plant by 2010," He said. The 30 MW power plant will be commissioned by 2008 and the 120 MW by 2010, he informed.

He was confident of doubling the turnover of the company in three to four years. Asked about the swap ratio, he said it was 1:14 in favour of IMFA and ICCL.

Mr Panda said the expanded capacity would require ore linkages for which the company would move the state government. Answering a question on whether the mining lease held by the companies will automatically get transferred to the new entity, Mr panda said requirement had always been calculated by taking both companies together.

He was, however, evasive when questioned about the benefits extended to ICCL by the government. Mr Panda was also reluctant to elaborate on the company's plans of setting up an alumina plant.

For any information relating to IMFA Group or to enquire about a Press Release issued by us please contact:

Mr Kishore Mohan Mohanty
Bhubaneswar
email: kishoremohanty@imfa.in