Manganese Ore to Join India’s Steel-Dominated Asset Sell-Off

March 9 (Bloomberg) -- India plans to sell about 10 percent of Manganese Ore (India) Ltd., the nation’s largest producer, as steel-related companies drive the government’s record sale of state assets.

The initial offering will be completed in the financial year starting April 1, steel minister Virbhadra Singh said in an interview in New Delhi, without specifying an amount. The ministry has approved the offer, which is awaiting final clearance from the department of disinvestment, Manganese Ore Finance Director M.A.V. Goutham said yesterday.

“The stake sale will be equivalent to about 10 percent of the company’s total shares,” Goutham said.

The government plans to raise 400 billion rupees ($8.8 billion), more than the combined fund-raising by all previous administrations, in the next fiscal year to help narrow the budget deficit from a 16-year high. India has 60 companies, including Steel Authority of India Ltd. and NMDC Ltd., in which it plans to raise funds to build roads, ports and utilities.

“Our ministry will contribute more than half of the government’s disinvestment target,” Singh said in an interview at his New Delhi residence on March 5.

The government aims to sell an 8.38 percent stake in NMDC, the nation’s largest iron-ore producer, in an offer starting March 10 and ending March 12. Steel Authority, the country’s second-largest producer, plans to offer 10 percent of its equity, while the government will sell a similar stake.

Federal Government

India’s federal government will sell 13 percent of its holding, minister Singh said.

Manganese Ore, 81.5 percent owned by the federal government and the remainder by the provincial administrations of Maharashtra and Madhya Pradesh, may have a 22 percent drop in sales for the year ending March 31, Goutham said, without giving a profit forecast. The economic slowdown last year curbed demand from steelmakers, which use manganese as a raw material, he said.

Manganese Ore, which operates 10 mines in the western state of Maharashtra and the central state of Madhya Pradesh, produces annually about 1.4 million metric tons of ore, or about 65 percent of India’s needs, according to its Web site. The company plans to set up a captive power plant and expand the capacity of its ferro-manganese plant.