Marmagoa Steel Ltd

Incorporated on 17 Jul.'87, Marmagoa Steel was promoted by N V Hegde, M G Poy Raiturkar and V S Bhandary. A G Poy Raiturcar is the chairman of the company. It manufactures billets and rolled products from carbon steel, mild steel and spring steel. The company came out with a public issue in Feb.'92 to part-finance a project for setting up a mini steel plant with a rolling mill to manufacture spring steel, carbon steel and mild steel and rolled products in various sizes, with an installed capacity of 75,000 tpa. The product-mix of the company has been detailed keeping in view the requirements of the market -- rolled spring steel flats will be used by original equipment manufacturers in the automobile industry, replacement manufacturers and the railways. Carbon and low-alloy steel sections will be used in shaftings, bright bars and forgings. As the accumulated loss was more than 50% of the company's net worth, a report was made to the BIFR. To prevent the company from becoming sick, the original promoters entered into a MoU with the Essar group on 26 Oct.'94. Essar has taken over the management and infused additional funds for the revival of the company. The working of the company improved considerably in 1994-95. The billets and rolled products production increased by 83% and 132% respectively. The company was able to reduce operational losses substantially by increasing production and also by reducing the cost of production. Strikes and voilence leading to lockout and closure of operations for over two months and operational shutdown for around three months due to voltage fluctations, frequent trippings had a toll on the company's performance during 1999-2000. The effect of the rehabilitation-cum-enhancement of working capital package approved by Banks was nullified due to delayed implementation of the same. MSL has now submitted an alternate proposal based on one time settlement of dues with the induction of co-promoter to IFCI, the operating agency for which approval is awaited. This year the company's capacity utilisation was at a very low level due to non availability of Working Capital Facilities and recession in the Economy resulting in lower demand.As the networth of the company has been fully erorded the company has been referred to BIFR and the company has been declared Sick.The company's board has recommende reduction of share capital due to erosion of networth.