Tourist Attractions

Reddy brothers Sold Brahmani

Kadapa: The Miglani family, which jointly controls the high grade steelmaker Uttam Galva Steel along with ArcelorMittal India, has acquired Brahmani Industries, a greenfield steel plant being built in Kadapa, Andhra Pradesh, by the controversial Reddy brothers, who also own mines and large tracts of land in the mineral-rich Bellary region of Karnataka.

Leading English daily Economic Times published a special story on this acquisition.

Full story as published in ET ….

On March 24, Brahmani Industries convened an extraordinary general meeting to approve change of its name to Uttam Galva Ferrous. “The management of the company is being taken over and the new management has contemplated changing the name of the company, in order to bring the company (Brahmani Industries) under its (Uttam Galva Ferrous) brand name,” said a statement in the notice for the EGM. ET has a copy of the notice. The EGM also approved the change in the statutory auditors of Brahmani, from Sarda & Associates to Prakkash Muni & Associates. The exact date of the acquisition is not known and the companies have made no public announcement.

Read :  వై.ఎస్ హెలికాప్టర్ దుర్ఘటన నివేదిక పై పత్రికల విశ్లేషణలు.

Uttam Galva Ferrous is an unlisted company owned by the Miglani family. The notice by Brahmani made no mention of valuation of the two million tonnes steel plant in Kadapa that it plans to build. Ankit Miglani, a director of Uttam Galva and a member of the promoter family, said he would not like to comment as the deal was carried out by an unlisted entity. A spokesperson for ArcelorMittal India also said the company did not wish to comment.

The steel plant that has been in the works of five years could cost 7,000 crore to build, according to an official of a steelmaker that had earlier considered buying Brahmani. The Reddy family has so far invested 1,700 crore as equity and in discussions with other suitors, they had negotiated on raising the remaining 1,800 crore, assuming an even spilt between equity and debt. Efforts to contact the Reddy family proved futile.

The valuation for Brahmani also includes the 11,700 acres that the promoters own in Kadapa and a commitment on iron ore supply from the Reddy family-owned Obulapuram Mines. The size of the land that Brahmani Industries owns, can accommodate two 5 million tonnes steel plants.

Read :  Municipalities Information - YSR District

The acquisition of Brahmani is significant as it gives ArcelorMittal India, the local unit of the world’s largest steelmaker, an opportunity to finally build a greenfield steel plant in India. The LN Mittal-owned ArcelorMittal India has not been able to progress on its earlier stated plan of building 12 million tonnes steel plants each in Orissa and Jharkhand, due to bureaucratic delays and land acquisition problems.

With the acquisition of Brahmani, ArcelorMittal India and the Miglani family can jointly build the 2 million tonnes steel plant and subsequently scale it up.

Brahmani Industries promoters include Gali Janardhana Reddy, a minister in the Karnataka government, who also owns Obulapuram Mines, which had attracted attention following allegations of widespread illegal mining of iron ore. The ore is a vital raw material for making steel and owning it cuts production costs by about 30-40%.

The Brahmani Industries’ plant was proposed five years back but could not progress due to lack of water linkages. The delay in building Brahmani’s steel plant was also due to allegations of irregularities in acquiring the land. The company was granted land by the Andhra Pradesh government at 18,500 an acre, a transaction which was opposed by the opposition in Andhra Pradesh.

Read :  20 MLAs, 6 MLCs and 2 MPs...

In the past, Janardhana Reddy had denied problems in arranging loans from financial institutions, saying that revenue generated by Obulapuram Mines would be used for the steel plant. Obulapuram would invest 1,050 crore in Brahmani Industries, Reddy had said.

Brahmani was earlier also on the radar of the Sajjan Jindal-owned JSW Group, India’s largest steelmaker. But differences over valuation and the reluctance of the Reddy family to offer equity stake in Obulapuram Mines along with Brahmani Industries, prompted the Jindals to walk away. It could not be ascertained whether the Reddy family has agreed to sell some stake in Obulapuram Mines to Uttam Galva Ferrous, as supply of ores would be crucial for the viability of Brahmani Industries’ steel project.

Check Also

Kadapa Goa

Kadapa to Vishakaptanm (Vizag) Train Timings

Kadapa to Vishakapatnam (Vizag) train timings and details of trains. Distance between Kadapa and Vishakapatnam. …

Kadapa Goa

Kadapa to Chennai Train Timings

Kadapa to Chennai train timings and details of trains. Distance between Kadapa and Chennai. Timetable …

One comment

  1. S.Sreenivasulu reddy

    Good morning ,this website is very good i am also from kadapa .can you send every details of brahmani steel ltd to my mail every day
    thanking you

Leave a Reply

Your email address will not be published. Required fields are marked *