VITAL INDUSTRY UPDATES – 18/05/2015

May 18, 2015 11:31 am Published by

 Zuari group set to hold over 53% stake in MCFL

Zuari group is set to have a majority stake of over 53 per cent in Mangalore Chemicals and Fertilisers Ltd (MCFL) as its open offer to buy 36.56 per cent share in the Vijay Mallya-led UB group firm for nearly Rs. 400 crore has been successful.

Zuari group’s open offer to acquire an additional 36.56 per cent stake in MCFL started on April 20. It currently has 16.47 per cent stake in the fertiliser firm.

The group will complete the process of acquiring about 4.33 crore shares from MCFL’s shareholders during this week, raising its stake to 53.03 per cent.

“Our open offer has been oversubscribed and I am planning to meet Vijay Mallya by the end of this month. I along with Mr Mallya, will work towards making MCFL one of the premier fertiliser companies in the country,” Zuari Group Chief Saroj Poddar told PTI.

Zuari was competing with Deepak Fertilisers for taking control of MCFL since July 2013, but latter withdrew from the race and has been selling the shares of MCFL through open market.

“Against our offer to acquire 4.33 crore shares of MCFL, as many as 5.2 crore shares have been tendered. But we can acquire only the shares offered in the open offer,” Zuari Global Managing Director Suresh Krishnan said.

These shares would be transferred in favour of Zuari group companies during this week, Krishnan added.

After the transfer of these shares, Zuari group will have 53.03 per cent stake in MCFL. UB group, the original promoter, has 21.97 per cent stake.

As per the shareholding pattern on BSE, both Zuari group and UB group are in the list of promoters. Together, they will have 75 per cent stake in MCFL.

Zuari group had announced the open offer in December 2014 to buy 4,33,29,000 shares in MCFL at Rs. 91.92 per share.

Meanwhile, Pune-based Deepak Fertilisers has reduced its stake in MCFL to 6.43 per cent from 31.25 per cent since December last year.

MCFL has a urea plant near Mangaore port with an annual capacity to produce about 4 lakh tonnes of urea and about 3 lakh tonnes of phosphatic fertilisers. Zuari group has a fertiliser plant in Goa.

Coal India to invest $20 billion in five years: Goyal

State-owned miner Coal India Limited (CIL) will invest $ 20 billion (over Rs. 1.27 lakh crore) to increase production to one billion tonne over the next five years, Coal Minister Piyush Goyal said today.

“CIL has set a target to attain one billion tonne of coal production by 2019-20. This would entail a ballpark investment of $ 20 billion,” Goyal told reporters here.

Goyal said that the money would be spent in technology, equipment and upgradation of the existing facilities. “A part of it will also go towards setting up infrastructure for evacuation”.

The investment amount had been arrived at following a detailed mine-by-mine plan, he said, adding that the balance sheet of CIL was strong enough to support the capital expenditure programme.

The increase in production will be from the existing mines and also the new ones.

Exuding confidence that the target is achievable, Goyal said that in the first 43 days of the current fiscal, there had been 11.1 per cent rise in production over the similar previous period.

During 2014-15, the increase in production was 32 million tonnes, while during the four year period from 2010 to 2014, the production was lower at 31 million tonnes.

The government would support this endeavour, he said, and urged all the stakeholders, including the state governments, for a shared responsibility. “This has to be achieved expeditiously in a time bound manner,” Goyal said.

Goyal said CIL would be opening 70 to 100 mines while the state governments would be adding 39 for boosting power production in their states.

Another 70 to 80 mines would be opened by the private sector, he added.

When asked whether the country would have enough consumption capacity for one billion tonne after five years, Goyal said that 28 crore Indians do not have electricity at homes.

“India needs to double electricity production to two trillion units in five years which will necessitate higher demand for coal,” he said.

CIL will become the most valuable company after five years, Goyal said, adding that it has been able to maintain profitability without raising prices.

Asked when CIL would hike prices, he said “it is a Maharatna company and will take its own decision”.

On coal imports, he said, “We will see a declining trend in the imports of thermal coking coal. It will stop after two years. But imports of high-calorific coal will continue”.

CIL is banking on its two subsidiaries, Mahanadi Coal Fields and South Eastern Coalfields, to play a pivotal role in targeted capacity expansion.

Last fiscal, CIL production was 494 million tonnes, 3 per cent short of target.

Asked about the next round of coal block auctions, Goyal said, “We are studying the demand-supply situation, environmental issues and the readiness of the mines”.

Regarding challenges relating to land acquisition, he said there were minor issues with ‘right of way’ and were being sorted.

 

Tata Power Renewable looking to buy wind, solar power assets

Tata Power Renewable Energy, a subsidiary of Tata Power Ltd, is set to expand its wind power generation capacity by 150 MW this fiscal.

This will take the company’s installed capacity to more than 700 MW.

The company is looking to acquire wind and solar power assets in the country.

“We are keen to expand the portfolio of both wind and solar projects in the country and are evaluating various opportunities,” said Rahul Shah, Chief Executive, Tata Power Renewable Energy, adding that both organic and inorganic options are on the cards. “We are open to acquisitions. Earlier, we had acquired a 40 MW wind power asset from AES Power.”

The company is ready to buy both completed projects and those with all clearances and set to be executed, he added.

Tata Power a total installed capacity of 8,750 MW, of which 1,383 MW belongs to clean and renewable energy. The company’s wind and solar portfolio stands at 566 MW.

Asked about new projects, Shah said: “Land acquisition and evacuation network is a problem for new projects. Therefore, we are looking out for opportunities in solar parks coming up in various States. “In the case of solar parks, land and evacuation are taken care of and as a developer, one can focus on the project. This could also cut down on time for implementation.”

Hybrid projects

Referring to issues relating to hybrid wind and solar projects, he said there was need for a clear policy framework for taking up such projects.

In any case, for wind projects, land available is not contiguous. But in cases where there is contiguous land, it would be possible to develop such hybrid projects, he said.

Six of the company’s renewable energy projects have been registered under the Clean Development Mechanism Programme of the UN Framework Convention on Climate Change.

These include wind farms in Karnataka, Gujarat and Maharashtra and a hydel project in Georgia.

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This post was written by Atlantic Admin