India group defers Riversdale bid decision to Jan 27
The Indian state consortium has deferred a decision on a possible rival bid for Africa-focused coal miner Riversdale to Jan 27 and it has sought more information from its adviser, its chairman said on Saturday.
January 23, 2011 / 14:04 IST
The Indian state consortium has deferred a decision on a possible rival bid for Africa-focused coal miner Riversdale to Jan 27 and it has sought more information from its adviser, its chairman said on Saturday.
The consortium, International Coal Ventures Ltd (ICVL), consists of utility NTPC, Steel Authority of India, iron ore miner NMDC, Coal India and steelmaker Rashtriya Ispat Nigam."We could not conclude the discussions and the issue will be taken up on Jan. 27," C.S. Verma told Reuters, after a meeting to discuss the possible bid. "Report has come from the banker and we have asked for some more clarifications."The consortium has appointed Citigroup to conduct due diligence on Riversdale.Anglo-Australian miner Rio Tinto has offered USD 3.9 billion to buy Riversdale in an agreed deal as it seeks secure coking coal reserves sought after by steelmakers. The Indian consortium has "at least two weeks" to submit a counter bid for Riversdale, said Verma, who is also the chairman of Steel Authority of India.Coal India Chairman Partha Bhattacharyya also told Reuters that no decision on a possible bid for Riversdale was taken at the meeting held on Saturday, and that the consortium members would meet again on Jan 27 to discuss the same.Bhattacharyya had told Reuters last month the consortium had the financial muscle to fund a possible rival bid for Riversdale and that the consortium was awaiting a recommendation from its adviser Citi on whether to bid.The four listed state firms in the consortium held combined cash reserves of around USD 9.6 billion as of the end of September and all four also have ambitious expansion and acquisition plans.No talks with Tata Steel International Coal Ventures Chairman Verma said that the consortium was not in talks with Tata Steel, a private-sector firm that owns 24% of Riversdale and is its largest shareholder, for a possible joint bid.Analysts in India have said Tata Steel, the world's seventh-largest steelmaker, should hold on to its stake in Riversdale to assure coal supplies for its Corus unit, which does not have any captive raw material supplies.Indian steel, power and coal companies are scouting for overseas coal mines to satisfy demand from the fast-growing economy, Asia's third-largest.Riversdale, with coking coal reserves in Mozambique, is an attractive asset for companies seeking to secure coking coal reserves amid soaring Asian demand for the key steel-making ingredient.Riversdale's Benga project could be expanded by a further 6 million tonnes a year for 20 years, which would raise the value of Riversdale shares to USD 20.80 each, a report by Commonwealth Bank of Australia said - well above Rio's A$16 per share offer. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
