Bolani Ores Limited (Acquisition of Shares) and Miscellaneous Provisions Act,1978
Act No : 42
Section : PRELIMINARY
BOLANI ORES LIMITED (ACQUISITION OF SHARES) AND MISCELLANEOUS PROVISIONS ACT, 1978
(42 of 1978)
8th December, 1978
STATEMENT OF OBJECTS AND REASONS Bolani Ores Limited was incorporated as a private limited company in June, 1957 for supplying iron ore mainly to the Durgapur Steel Plant. The capital of the company was contributed by the Government of India to the extent of 50.5 pet cent.. the remaining 49.5 per cent. being contributed by the Orissa Mineral Development Company Limited (OMDC), a company of the Bird Group. In February, 1973. the shares of the Central Government in the company were transferred to the Steel Authority of India Limited (SAIL).
2. The present Financial position of the company is far from satisfactory. The accumulated losses suffered by the company till the end of 1977-78 are over Rs. 270 lakhs against the paid-up capital of Rs.100 lakhs. The company is in immediate need of funds to the extent of about Rs. 250 lakhs to complete the capital schemes in hand and for providing balancing facilities and to replace some of the worn out earth moving machinery, failing which the regular supply of iron ore of adequate quality to the Durgapur Steel Plant cannot be ensured. Bolani Ores Limited is the main source of supply of iron ore to the Durgapur Steel Plant which has no other alternative economic source of bulk supply and closure or inefficient working of the mine by the Bolani Ores Limited, will seriously affect the interests of the steel plant. The OriMa Mineral Development Company is not interested in making any further investment in the Bolani Ores Limited. In order :o ensure the regular supply of adequate quality of iron ore to the Durgapur Steel Plant, it is necessary that substantial investments are made in the Bolani Ores Limited by the Central Government. It is therefore necessary in the public interest to take over the company.
The Bill proposes to acquire the shares held by the OMDC in the Bolani Ores Limited, To facilitate the efficient management of the Bolani Ores Limited, it is proposed to transfer the undertaking of that company to the Steel Authority of India Limited which is the apex body for all steel plants.
3, The present state of affairs of the Bolani Ores Limited has revealed that the shares of the company do not have ®ny value under the conventional methods of valuation namely, net worth and profit earning capacity. It is however proposed to make a payment of an amount of Rs. 49.500 at the rate of rupee one for each share of the face value of Rt. 100 for the acquisition of the shares.
4. The Bill seeks to achieve the above objecis. -See Gaz. of Ind., 31-8-78, Pt. II, S. 2. Ext., p. 1310. An Act to provide for the acquiliticn of share* of the Bolinl 0m Limited In public In tWMt in order to Mrve bcttw MM needs of the nation and to facility the promotion and development in the Interetti of the eneral pubUe, ofnitional iteol industry and for matters connect*d therewith or ineldfntal thereto.
WHEREAS Bolani Orei Limited was incorporated as a private limited company in Jur.e, 1957 for supplying ores mainly to the Durgapur Steel Plant:
WHEREAS 50.5 per cent shares in the share capital of the said Bolani Ores Limited are held by the Steel Authority of India Limited, a wholly owned Government company and the remaining 49.5 per cent. shares are held by the Orissa Minerals Development Company Limited;
WHEREAS cumulative losses suffered by the said Bolani Ores Limited at the end of 1977-78 were to the extent of over Rs. 270 lakhs and the said Bolani Ores Limited is in need of urgent funds to carry on the operations of its undertakings;
AND WHEREAS the Orissa Mineral Development Company is not willing to contribute any further amount towards the share capital of the Bolani Ores Limited;
AND WHEREAS the Bolani Ores Limited is the main source of supply of iron ores to the Durgapur Steel Plant and without further substantial investments by way of capital outlay and otherwise the supply of iron ores to the said Plant cannot be maintained;
AND WHEREAS It is expedient in the public interest that the shares of the said Bolani Ores Limited should be acquired;
BE it enacted by Parliament in the Twenty ninth Year of the Republic of India as follows :-
CHAPTER 01: PRELIMINARY
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