Billionaire Sajjan Jindal’s JSW Steel plans to acquire a US-based coking coal mine with 123 million tonnes of estimated resources. The cost is estimated to be $100 million (Rs 450 crore). The mine is based in West Virginia, with multiple owners, said the company.
“One of these mines is already operational, and the balance can be made operational in the next two years,” said Seshagiri Rao, director finance. The company is targeting to produce a million tonnes in the first year and then ramp it up to three million tonnes in the third year.
India’s third largest steel producer, JSW recorded net profit of Rs 611 crore in the quarter ended March 31 against a net loss of Rs 39.9 crore in the same quarter last year. It had raised prices by as much as seven per cent in the quarter ended March 31. Net sales for the company in the period grew 52.4 per cent, to Rs 5,441 crore.
The stock lost 0.5 per cent to Rs 1,221 a share on the Bombay Stock Exchange post the announcement of the result. Sensex, the benchmark index of the exchange, lost one per cent to 17,386 on the day.
The company said it had planned Rs 7,000 crore of capital expenditure in the current financial year, to take its existing capacity at Vijaynagar (Bellary district of Karnataka) to 11 million tonnes from the current 7.8 mt. For this, it has Rs 2,200 crore from internal accrual and has tied up debt of Rs 4,800 crore. The company has total debt of Rs 16,173 crore and its debt to equity ratio came to 1.49.
The company also said it would raise Rs 2,100 crore through preferential allotment of 17.5 million warrants, constituting 9.36 per cent of the existing paid-up equity share capital of the company, to the promoters. The warrants can be converted to equity within 18 months of the allotment.
The company also plans to increase its production of value-added automobile grade steel, after agreeing to share technology with Japan’s second-largest steel maker, JFE Holdings. The two are to also collaborate on a factory in West Bengal.
