just the beginning, page-5

Mumbai, Dec. 24

The International Coal Ventures Ltd (ICVL), a consortium of public sector companies, has a month's time to bid higher than $3.9 billion for Riversdale Mining Ltd.

ICVL has appointed Citibank as the merchant bankers to prepare the bid and it will come out with a report in the next couple of weeks.

�Our merchant bankers will submit their report in the next two weeks. After the report is submitted the board of ICVL will meet to decide on the further course of action,� said Mr C. S. Verma, Chairman, ICVL and Steel Authority of India Ltd.

If successful, the acquisition would be a first from ICVL, which is a special purpose vehicle formed by the Steel Ministry to acquire coal assets abroad, and includes five big PSUs including SAIL, Coal India Ltd, NTPC, NMDC and Rashtriya Ispat Nigam Ltd.

SAIL and CIL each hold 28 per cent share in ICVL and RINL, NMDC and NTPC hold 14 per cent each.

Commenting on the amount of money that SAIL would put in the acquisition of Riversdale, Mr Verma said that a decision would be taken only after the board meeting.

Tata Steel holds 24 per cent stake in Riversdale and is its largest shareholder. Sources say there have been talks between ICVL and Tata Steel for a joint bid or at the very least support from Tata Steel for ICVL's bid. However, ICVL did not confirm that any talks took place between the consortium and Tata Steel.

Rio offer price

For a successful acquisition, ICVL will have to top Rio Tinto's offer price of A$16 a share for Riversdale which values the company at close to $3.9 billion.

Earlier, Rio Tinto said that it had secured the support of Riversdale's shareholders including senior executives and institutional investors who own 14.9 per cent shares in the company. A bid from ICVL would also need the support of the shareholders.

Riversdale has 13 billion metric tonnes in coking and thermal coal reserves in its Benga and Zambeze projects in the Southern African country of Mozambique.

Acquiring the miner would help Indian companies secure the much needed coal supplies, as production in India falls well short of demand.

The country's coal demand is forecast to rise to 713.24 million tonnes next financial year, while supply will be only 629.91 million tonnes.

Public and private sector companies have been scouting assets in places such as Africa, Indonesia and Australia in order to overcome the shortage in coal supply.







Related Stories:
Rio Tinto's Riversdale Mining bid may put Tata Steel in a spot
Tata Steel Global acquires more shares in Riversdale Mining