Sajjan Jindal-led JSW Steel today said it has got shareholders nod to issue over 9.7 lakh equity shares on a preferential basis to Japanese steel-maker JFE Steel.
With the approval, the stake of the Japanese steel-maker in the Indian company will go up to 14.99 per cent.
The move is in line with the deal inked between the two steel firms earlier this year, under which JFE Steel will pick up a 14.99 per cent stake in JSW Steel for Rs 4,800 crore. This will help the domestic company reduce its debt.
JSW Steel today said it got shareholders approval by postal ballot for the "issue of up to 9.7 lakh equity shares to JFE on preferential basis," and "issue of 30 lakh global depository receipts to JFE, Steel Corporation Japan on a preferential basis," the company said in a filing to the Bombay Stock Exchange.
Both the resolutions "have been passed by requisite majority," the filing added.
In October, JFE had acquired 32 lakh shares (about a 14.61 per cent stake) in JSW Steel through the conversion of convertible debentures on a preferential basis.
The Indian company plans to quadruple its annual capacity to 32 million tonnes by 2020 from the current 7.8 million tonnes, starting with a 3.2 million tonne expansion project at its Vijayanagar plant in Karnataka by the end of the current fiscal.
JFE will invest Rs 900 crore more in JSW Steel by 2012 to help finance the Indian company's growth projects and reduce its debt, which is currently in excess of Rs 16,000 crore.