ArcelorMittal buys stake in Uttam Galva Steels

NEW DELHI: Uttam Galva Steels on Friday said ArcelorMittal Netherlands, a unit of leading steelmaker ArcelorMittal, has taken a stake in it and become a co-promoter of the firm. Uttam Galva did not disclose the financial details of the deal. It said ArcelorMittal would make an open offer and nominate half the non-independent directors on the board. (Watch)

Shares in Uttam Galva, which posted gross sales of Rs 4,510 crore in 2008-09, closed 10% higher at Rs 113.70 on BSE on Friday. Uttam Galva has capacity to produce 750,000 tonnes a year of galvanised steel and 1 million tonnes a year of hot and cold rolled coils at its plant in western India.

As of year ended March, the shareholding of Indian promoters of Uttam Galva stood at 37.36% while public
shareholding was 16.38%. The company board said it had approved a co-promotion agreement between ArcelorMittal Netherlands and Galva promoters that made the ArcelorMittal subsidiary a co-promoter.

In the event that the proposed open offer is undersubscribed, the Galva promoters will offer ArcelorMittal the rest of the shares so that their relative shareholdings in the company become equal. Uttam Galva, established in 1985, makes galvanised plain (GP) and cold rolled (CR) steel. It deals with the business activities of procuring hot-rolled (HR) steel and then processes it into CR steel, colour-coated coils, and galvanised steel.

It specialises in manufacturing galvanised steel as thin as 0.15 mm super-thin sheets. The company supplies CRCA to the producers of general engineering, automobiles, barrels and drums segment, and white goods. It also supplies galvanised sheets and coils in large quantities to the construction industry. The company���s production units are in Khopoli, Maharashtra, and are close to Mumbai and Nhava Sheva ports.