HEG to sell its steel biz for Rs 88.5 cr
HEG Ltd will be selling its fully integrated steel business at Durg to Jai Balaji Industries Ltd of Kolkata for Rs 88.5 crore.
By INDIATIMES NEWS NETWORK |
MUMBAI: HEG Ltd will be selling its fully integrated steel business at Durg to Jai Balaji Industries Ltd of Kolkata for Rs 88.5 crore.
The steel unit, which makes sponge iron, steel billets and also has a13 MW waste heat recovery system power plant, will be de-merged with effect from August 1.
The hiving off of steel unit will allow HEG to focus on its core competence of graphite electrode production and power generation businesses.
HEG plans to use the sale proceeds to retire debt and strengthen balance sheet. Interest cost is expected to come down, benefiting net earnings going forward, the company said in a notice to the Bombay Stock Exchange.
HEG’s margins are also likely to improve as the steel business was a low margin operation.
The shares of HEG closed at Rs 231.75, up 4.18 per cent on the BSE.
The steel unit, which makes sponge iron, steel billets and also has a13 MW waste heat recovery system power plant, will be de-merged with effect from August 1.
The hiving off of steel unit will allow HEG to focus on its core competence of graphite electrode production and power generation businesses.
HEG plans to use the sale proceeds to retire debt and strengthen balance sheet. Interest cost is expected to come down, benefiting net earnings going forward, the company said in a notice to the Bombay Stock Exchange.
HEG’s margins are also likely to improve as the steel business was a low margin operation.
The shares of HEG closed at Rs 231.75, up 4.18 per cent on the BSE.
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