The Hindu Business Line : Iron ore terminal — Sical to form jt venture with L&T, MMTC

SOUTH India Corporation (Agencies) Ltd (Sical) will set up a joint venture with L&T and MMTC, once it is formally announced that the consortium has won a contract for implementing a Rs 500-crore iron ore terminal project at the Ennore Port.

A formal announcement of the consortium winning the tender for the project is to be made, but the Union Minister for Shipping, Mr T.R. Baalu, had recently informed presspersons of the decision to award the project to the Sical-led group.

The project is to be implemented on build operate own and transfer (BOOT) basis and will be owned by the joint venture for 30 years.

Sources said Sical would have a 63 per cent stake in the joint venture, with L&T and MMTC holding 11 per cent and 26 per cent, respectively.

While the capital structure of the joint venture is being worked out, sources said it was likely that the equity portion would be Rs 150 crore. Sical then, may have to come up with Rs 100 crore as its contribution.

The company on Wednesday announced a proposal to raise about Rs 250 crore, through either a rights or a public issue or an overseas offering. It is understood that part of the funds would be utilised to fund the equity of the joint venture.

Sources said there was a good fit among the three partners. L&T is an expert in infrastructure building, while the public sector MMTC — a traditional iron ore exporter — would provide the load. Sical has been in the business of material handling at ports for a long time.

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