Naveen Jindal-led JSPL is in advanced stages of discussions to acquire the controlling stake in Canada's CIC Energy for about Rs 1,800 crore.
CIC Energy in a filing to Toronto Stock Exchange said talks are on for possible acquisition of the company at an indicative price of CAD (Canadian Dollar) 2 per share but it did not specify how much stake will be bought by Jindal Steel and Power Ltd (JSPL).
Sources in JSPL said the deal size is estimated to be around Rs 1,800 crore and the steel maker is looking at acquiring more than 30 per cent stake in the Toronto Stock Exchange-listed firm.
The deal, if successful, would provide the Indian firm access CIC's 2.6 billion tonnes of high quality thermal coal in Botswana, which will ensure long-term fuel security to JSPL's power ventures, including that of subsidiary Jindal Power.
JSPL together with Jindal Power has chalked out an ambitious target of having more than 25,000 MW electricity generation capacity by 2020.
"CIC Energy confirmed today that it is currently in advanced negotiations with Jindal Steel and Power (Mauritius) Ltd, a wholly-owned subsidiary of JSPL, regarding the possible acquisition of the company at an indicative price of CAD 2 per share," CIC said in the filing.
Moreover, the deal may also take JSPL into coal trading as it has already has coal mines in Indonesia, Australia, Mozambique and South Africa.
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Earlier, CIC Energy's talks with JSW Energy, a group firm of JSW Steel and promoted by Naveen's brother Sajjan Jindal, had failed in June. However, the two firms had signed an exclusivity agreement.
The development comes just a day after JSPL terminated its $2.1-billion mining project in Bolivia, which included 40-years mining rights to El-Mutun mines -- considered as one of the largest untapped iron ore mines in the world.
As per the CIC filing, both the firms are yet to sign a binding agreement for the deal.
"While negotiations are ongoing, a binding agreement has not yet been signed. Therefore, there can be no assurance that any transaction will result from these discussions, or as to the timing, structure or terms of any transaction," it said.
The Canadian firm has a mining-cum-power complex called Mmamabula Energy Complex in Botswana, Africa and its Mmamubala coal field is estimated to hold 2.6 billion tonnes of high thermal coal, mostly above 6,000 kcal/kg of calorific value.
According to the company website, CIC is working to begin production in next 3-4 years and thereafter, it will export up to 24 million tonnes of coal per year from the Mmamabula coal field. The Canadian firm is also developing a coal-fired power plant and a coal-to-hydrocarbons project.