Sajjan Jindal-led JSW Steel today said it will issue over 9.7 lakh equity shares on a preferential basis to Japanese steel-maker JFE Steel.
Post-allotment, 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 would 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 its board has given in-principle approval for the "issue of up to 9.7 lakh equity shares to JFE on preferential basis," subject to shareholders' approval.
Earlier this month, 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 domestic steel-maker further said that its board has agreed to the "issue of 30 lakh non-voting, non-transferable global depository receipts to JFE on a preferential basis..."
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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 mt 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.