Riversdale could fall into Indian hands

RIVERSDALE Mining’s largest shareholder, Indian steel giant Tata, has not yet decided whether to challenge Rio Tinto’s $A3.9 billion bid for the Mozambique coking coal miner but will not necessarily block the $16 per share offer.
Riversdale could fall into Indian hands Riversdale could fall into Indian hands Riversdale could fall into Indian hands Riversdale could fall into Indian hands Riversdale could fall into Indian hands

Image courtesy of Riversdale Mining.

Lou Caruana

Tata, which has a strategic 24% stake in Riversdale, was keen to ensure supply from the company’s 13 billion tonnes of coking and thermal coal reserves at the Benga and Zambeze projects, Tata Steel managing director HM Nerurkar is reported to have said.

“We have invested in Riversdale not for financial incentives, but for securing coking coal supplies for our Indian and European operations ... so good management of Riversdale is essential for us,”The Australian quoted him as saying.

While the group would cooperate with any company that took over Riversdale, Nerurkar did not rule out Tata making its own takeover offer.

In a regulatory statement last week, Tata Steel said it would “evaluate the takeover bid in the context of other alternatives available”

“One needs deep pockets for making a counter-bid ... we are at present watching the situation closely,” Nerurkar reportedly said.

Meanwhile, a separate Indian bid for Riversdale could eventuate under the International Coal Ventures joint venture of Indian state-run companies.

ICVL, which comprises Steel Authority of India, NTPC, NMDC, Rashtriya Ispat Nigam and Coal India, has appointed Citibank as its adviser for a possible bid.

“So far (as) Riversdale is concerned, we are very serious about it ... there is no financial problem,” Indian Steel Minister Virbhadra Singh reportedly said.

“ICVL is a company formed by various public-sector companies. So, as it stands, it cannot take in a non-public sector company as a partner.”

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