MSTC Completes Strategic Disinvestment of FSNL to Konoike Transport Co for Rs 320 Crore

The full transfer of FSNL's shareholding to Konoike Transport Co Ltd marked the completion of its strategic disinvestment. This move, confirmed by the Department of Investment and Public Asset Management (DIPAM), finalised the privatisation process approved last September. The government had agreed to sell FSNL, a subsidiary of MSTC Ltd, to the Japanese company for Rs 320 crore.

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In October, a share purchase agreement was signed, paving the way for this transaction. DIPAM announced on X that FSNL's management control has now shifted to Konoike Transport Co Ltd, with a new Board led by the Strategic Partner taking charge. FSNL operates under the steel ministry as a fully owned subsidiary of MSTC Ltd.

Strategic Sale and Bidding Process

The government received two technically qualified financial bids for FSNL. Konoike's bid of Rs 320 crore surpassed the reserve price of Rs 262 crore, which was determined by a valuation from the transaction adviser and asset valuer. The other bid came from Indic Geo Resources Pvt Ltd, a subsidiary of Chandan Steel Ltd.

Konoike Transport Co Ltd is a diversified Japanese corporation listed on the Tokyo Stock Exchange. Its Steel Division, with over 140 years in steelworks operations, offers comprehensive services. These include raw material acceptance, manufacturing processes, slag treatment, scrap processing, examination, packaging, and delivery of steel products.

Konoike's Expertise in Steel Operations

Konoike's Steel Division also focuses on recycling projects like the perfect recycling system. This initiative recycles industrial waste without generating secondary waste. Such expertise aligns with FSNL's core operations in steel mill services and scrap recovery from slag during iron and steel production.

FSNL was established on March 28, 1979, to provide specialised services in steel mills. It focuses on recovering and processing scrap from slag produced during iron and steel manufacturing across various plants. This strategic sale aims to enhance FSNL's capabilities through Konoike's extensive experience in the steel industry.

The successful conclusion of this transaction signifies a significant step in India's privatisation efforts. By transferring management control to an experienced international player like Konoike, FSNL is poised for growth and innovation in its operations.