Business Standard reported that the Mr Miglani family, joint owner with ArcelorMittal of Uttam Galva Steels, has completed the acquisition of Lloyds Steel by reconstituting its board. The company is now in talks with private equity companies to inject funds in Lloyds.
Mr Ankit Miglani, from the new promoter group, said that “Currently, we do not need significant capital expenditure in Lloyds but are in talks with a few PE companies for investment at a later stage.”
Mr Ankit Miglani said that “We have spent INR 647 crore in the stake buy and will now work to bring the company back to profitability.”
Mr Miglani said that “Lloyds has been using money from the secondary market at interest rates as high as 24%. They now plan to raise these funds from banks, which will cut interest rates by half.”
The capacity utilization of Lloyds is 50% and the new board plans to increase it to 750,000 tonnes from the present 500,000 tonnes by the end of the next financial year.
He said that “We target to double the pure earnings without significant capital expenditure by streamlining the product mix and bringing down the cost of debt.”
The family now holds 58.35% in Lloyds. Another 21% remains with the latter’s earlier promoters.
The erstwhile promoters of Lloyds have resigned and Mr Rajinder Miglani, Mr Ankit Miglani and Mr Rajiv Munjal have taken over management of the company. Mr Rajinder and Mr Ankit Miglani are chairman and deputy managing director, respectively, of Uttam Galva Steels.
Lloyds has been a loss making company for a while. These had totaled to INR 213 crore for the past two financial years. The total debt is INR 441 crore.
