PSU firms JV awaits Citi advice on Riversdale bid
Mumbai, Dec. 24: A consortium of Indian state-run companies has the financial strength to fund a possible rival bid for Africa-focused coal miner Riversdale, the chairman of one of the group’s members said on Friday.
Anglo-Australian miner Rio Tinto offered $3.9 billion on Thursday to buy Riversdale in an agreed deal as it seeks secure coking coal reserves sought after by steelmakers.
Mr Partha Bhattacharyya, the chairman of Coal India, said the consortium, International Coal Ventures Ltd (ICVL), was awaiting a recommendation from its adviser Citigroup on whether to bid.
“All the companies in ICVL are strong financially. Funding will not be a problem,” he said.
Mr Bhattacharyya also said that ICVL was not in formal talks with India’s Tata Steel, a private-sector firm that owns 24 per cent of Riversdale and is its largest shareholder.
However, a source familiar with the matter said on Friday, “Everyone is talking to everyone,” when asked whether ICVL and Tata Steel were in talks to form an alliance.
The person said talks included the possibility of a joint bid for Riversdale or support from Tata Steel for an ICVL bid.
ICVL consists of utility NTPC, Steel Authority of India Ltd, iron ore miner NMDC, Coal India and steelmaker Rashtriya Ispat Nigam Ltd.
On Thursday, the Indian group hired Citigroup to conduct due diligence on Riversdale, with a report to be submitted in two weeks and a decision on whether to bid within a month, Mr Bhattacharyya said.
“Citi’s mandate is to tell us whether we should consider a bid higher than $3.9 billion,” he said.
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