IMR plans to buy a stressed steel plant in Odisha

Kolkata: IMR Metallurgical Resources AG, the Swiss commodity trading group that recently bought Tata Steel’s iron ore mines in South Africa, is in advanced talks with bankers to acquire a stressed steel plant in Odisha, a top official said.

“We are speaking to bankers to acquire a stressed steel plant in the eastern region,” said Sanjay Sinha, director at IMR Metallurgical Resources. “We hope to close the deal soon.”

IMR, which had bid for ferro alloys producer FACOR under the NCLT last year, is now keen to expand in India by “acquiring small and medium-size firms outside the NCLT that can help us get into steel production”, Sinha told ET.


He did not reveal the identity of the plant the company seeks to buy.

The deal, if it goes through, is likely to set a precedent for foreign firms buying into India’s steel industry.

IMR is involved in global trading, marketing and financing of bulk commodities like, coking coal, iron ore, and iron & steel products.

While the Swiss trader will ensure raw material linkage to the steel plant through its global trading portfolio, it could partner PE firms in the acquisition. It is also in dialogue with professional management services firms to bring one of them on board as operational partner to run these plants.

“India’s steel sector is poised for big growth,” Sinha said. “We believe, with professional management on board and unsustainable debt out of the books, these assets would stand to offer good returns.”

IMR has just concluded the deal for buying out Tata Steel’s mining assets in South Africa, the domestic steel major had informed the exchanges in a notification on Tuesday.

In October last year, as part of its plans to scale down operations in that country, Tata Steel had agreed to sell an iron ore mine in South Africa to IMR for 366 million South African rand, or about $25.6 million (approx Rs 188 crore). The transaction was expected to close within a year, but the deal was concluded before the stipulated time.