Concast Group buys SPS steel plant for Rs.800 cr

Bhubaneswar : Kolkata-based Concast Group has acquired Bipin Vohra promoted SPS Steel’s Jharsuguda-based steel plant for Rs.800 crore. The new owners have renamed the steel unit as Concast Steel and Power Ltd after the takeover.

Concast has paid Rs 125 crore upfront in a cash deal to SPS Steel. The rest of the money will be paid by Concast in the form of interests and repayment of loan incurred by SPS, said Sanjay Sureka, chairman and managing director of Concast Group.

The 0.8 million tonne steel plant at Jharsuguda clocked a revenue of Rs 2,344 crores in 2010-11, up by 69 per cent from the previous year. The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) in 2010-11 were Rs 183 crores, up 40 per cent from 2009-10.Concast has plans to raise the production capacity at Jharsuguda unit to 1.2 million tonne by infusing Rs 630 crores capital.

The Jharsuguda based steel plant currently sources iron ore from Orissa Mining Corporation (OMC) and other private miners to meet its requirement of 1 million tonne of iron ore per annum.

Jharsudgua steel unit would be the second largest revenue generating unit of Concast Group, behind its export-import business, Concast Exim Ltd. The company is also into the business of cement production and real estate.Concast recently bought a Jamshedpur-based cement plant and its lime stone mine at a price of Rs 200 crores.