The government on Thursday approved the privatisation of Ferro Scrap Nigam Ltd (FSNL), a state-owned steel plant, to the Japanese corporation Konoike Transport Co Ltd for ₹320 crore.

FSNL, a 100 per cent subsidiary of MSTC Ltd under the steel ministry, had received two technically qualified financial bids for its sale.

The alternative mechanism, a government body comprising transport minister Nitin Gadkari, finance minister Nirmala Sitharaman and steel minister H. D. Kumaraswamy, approved Konoike's bid as the highest.

“The transaction now moves to concluding stage. The next steps include issuing the Letter of Award, signing the Share Purchase Agreement (SPA), fulfilling the conditions precedent as specified in the SPA by respective parties, and closing the transaction,” the finance ministry statement said.

Konoike's bid of ₹320 crore surpassed the reserve price of ₹262 crore set by the transaction adviser and asset valuer.

The two technically qualified financial bids were opened in the presence of the representatives of the bidders.

The other bidder was Indic Geo Resources Pvt. Ltd.

Konoike Transport Co Ltd is a diversified Japanese corporation with a long 140-year history in the steel industry.

Its steel division offers a wide range of services, including raw material acceptance, manufacturing processes, slag treatment, scrap processing and recycling projects.

FSNL, incorporated in 1979, specialises in recovering and processing scrap from slag generated during steel making. The government had granted in-principle approval for FSNL's strategic disinvestment in 2016. The sale of FSNL marks a significant step in India's privatization efforts.