For the second time in four years that the Rourkela-based Shiva Cement Ltd, India, has failed to find a strategic partner despite several attempts made by its merchant banker. In August 2003, the board of directors of Shiva Cement mandated SBI Capital Markets to search and negotiate a deal for a partner.
Mr RP Gupta Managing Director of Shiva Cement told the Indian Business Line, that no development has taken on this front and currently SBI Capital Markets is "going slow". Industry sources said that the proposed partner was expected to bring in some money which would have helped Shiva Cement to tide over its financial crisis.
Earlier, Shiva had worked out an attractive ECB (external commercial borrowing) of $7 million (approximately Rs 25 crore - Rs 30 crore) from the Zurich-based Habib Bank. However it failed to materialise due to the strict guidelines of the Reserve Bank of India. As a way out, the company made a successful preferential issue of shares and warrants by the end of the last financial year 2003-04. According to Mr Gupta the company raised Rs 4.91 crore through these two instruments.