Mumbai : Shares of Visa Steel Ltd (VSL) on Friday surged 20 per cent after the company said it will seek shareholders' approval for the merger of its JV firm Visa Bao Ltd (VBL) in an attempt to optimise costs and secure availability of resources for its ferrochrome business. The stock of Visa Steel added as much as 20 per cent at Rs 16.38 on BSE.
VBL is a joint venture (JV) between VSL and Baosteel of China, with VSL holding 65 per cent stake and the remaining with Baosteel. In order to have sustainable growth, it is necessary for any ferrochrome producer to have captive chrome ore mine or a captive power plant, if not both, VSL said in a regulatory filing. "Hence, with a view to achieving competitive advantage to ensure availability of chrome ore and concentrates and optimise the utilisation of the power plant capacity, it is intended to consolidate the ferrochrome business of VSL and VBL by amalgamating VBL with VSL," it added