NMDC to pick up at least 51 pc in struggling KIOCL

In a bid to bail out its ailing behemoth Kudremukh Iron Ore Company Limited (KIOCL) from its financial morass,the steel ministry today said its mining giant National Mineral Development Corporation (NMDC) would acquire at least a 51 per cent stake in it and vowed to intensify efforts for the fructification of the partnership acquisition. Outlining the ministrys 20-point agenda for the next 100 days,steel minister Virbhadra Singh said his ministry has proposed that NMDC,a navratna company,would acquire a majority stake in KIOCL,which is facing a severe raw material crisis following the closure of its mining operations in 2006. It is proposed that NMDC will acquire a majority stake in KIOCL and the latter would acquire a stake in the mining giant, Singh said here.

Though,the ministry did not elaborate,KIOCL chairman and managing director K Regnant said under the proposed deal,NMDC would acquire at least a 51 per cent stake in the company through acquisition of shares,which would enrich his companys stake by Rs 315 crore given the face value of the shares. It is a win-win situation for both the companies. I will be happy if we get iron ore from NMDC at the cost price, Ranganath told The Indian Express over telephone from Bangalore. Reacting to the development,chairman and managing director of NMDC Rana Som said,Well it has been proposed and we would definitely consider it. It is a challenge,which we accept. As far as I understand,KIOCL would become our subsidiary and if the partnership fructifies,we would do the needful.