| NEW DELHI
NEW DELHI Aug 12 India's Saraf family, which
has 23 percent of an iron ore mine owned by metals trader
Stemcor, would be given the first option on buying out the UK
firm if it decides to sell its majority stake, two sources close
to both the sides told Reuters.
Debt-laden Stemcor is exploring options for the mine and JSW
Steel, Jindal Steel and Power and Tata Steel
are some Indian steelmakers to have shown an interest
in it, according to executives at the companies.
The mine, with a separate iron ore processing facility that
Stemcor fully owns, is estimated to have an enterprise value of
$700 million to $750 million, an industry source said earlier.
Though Stemcor has appointed Goldman Sachs to look at
options for both the mine and the plant, Indian steelmakers are
more keen on the mine because of a shortage of the raw material
in the country.
The mine, Aryan Mining and Trading Corp, has reserves of
more than 100 million tonnes, with a licence to mine 3 million
tonnes per year, according to Stemcor's website.
There have been reports that the mine and the plant could be
auctioned given the interest in them.
But the Indian management of Aryan Mining, in which Stemcor
has a 77 percent stake, denied the reports that Stemcor was
inviting bids for selling the asset.
"Stemcor is a shareholder of Aryan Mining and being a
shareholder does not confer any right to sell or auction the
assets of company," Aryan Mining said in a statement to Reuters.
Aryan Mining's company secretary RK Agarwal declined to
comment beyond the statement.
"There is a possibility that the Saraf family will bid for
the stake as they have the right of first refusal," said a
source close to the Indian management of Stemcor.
A Stemcor source said Goldman Sachs was looking at ways in
which the company could "bring in new investments into the
assets or scale down its own investment".
Stemcor, controlled by the Oppenheimer family, has come
under pressure from lenders to sell assets after it failed to
refinance a $850 million loan due in May.
"Everything is at a very early stage. We're not going to do
anything that might offend our partners," said the Stemcor
source, who declined to be named.
(Reporting by Krishna N Das; editing by David Evans)