The O P Jindal group has put its plans to acquire Shree Vishnupriya Steel on hold. The proposed acquisition, which was primarily on the insistence of financial institutions, had almost reached its final stage.
However, with the institutions setting a few last minute stiff terms on the proposed acquisition, the Jindals have decided against going ahead with the deal, senior company officials said.
Jindal executives said, "We have already submitted our takeover package based on the terms and conditions decided upon at the initial stages. But at present, they are insisting on certain new terms which are difficult for us to accept. Hence, we have put the plan on hold."
The executives refused to divulge details regarding the takeover package.
The Jindals were planning to acquire the Hyderabad-based ailing steel unit through a special purpose vehicle in which both Jindal Vijaynagar Steel Ltd (JVSL) and Jindal Iron & Steel were to hold equity, besides financial institutions.
Financial institutions had insisted that the Jindals takeover the ailing 2.25 lakh tonne cold-rolling project, given the synergies that could have been exploited by JVSL and Jisco.
Moreover, Shree Vishnupriya, which is located at Nandayal in Andhra Pradesh, is around 250 km from JVSL's unit at Thorangallu near Bellary in Karnataka. Hence, relocating the plant to Thorangallu would have been easier.
The institutions have already sanctioned loans to the tune of Rs 100 crore and were in the process of sanctioning Rs 100 crore more.
