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JSW to raise Rs 462 cr through the issue of securities to JFE

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Press Trust of India New Delhi

JSW Steel today said it will raise Rs 462 crore through the issuance of securities to Japan's JFE Steel Corporation.

The Japanese firm currently has 14.61 per cent stake in the Sajjan Jindal-led firm.

"The Finance Committee, a sub-committee of the board of directors of the company, at its meeting... Decided to open on December 13, 2010, the issuance of 3,085,814 GDRs to JFE Corporation, Japan, on a preferential basis," JSW Steel said in a filing to the Bombay Stock Exchange.

The issuance of Global Depository Receipts (GDRs) has been approved by JSW Steel's board and shareholders.

Each GDR would be priced at Rs 1,500, valuing the total issue at around Rs 462 crore.

On December 6, JSW Steel received its shareholders' nod to issue over 9.7 lakh equity shares on a preferential basis, as well as GDRs, to JFE Steel.

Earlier this year, the two steel firms had inked a pact under which JFE Steel was to pick up a 14.99 per cent stake in JSW Steel for Rs 4,800 crore.

After the issuance of over 9.7 lakh equity shares, the Japanese firm's stake in the domestic company would rise to 14.99 per cent from current level of 14.61 per cent.

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.

JFE Steel plans to invest Rs 900 crore more in JSW Steel by 2012, which would not only aid the domestic company's growth plans, but also help it to reduce debt. JSW Steel's debt burden is estimated to be over Rs 16,000 crore.

The Indian company plans to quadruple its annual capacity to 32 million tonnes by 2020 from 7.8 million tonnes at present, starting with a 3.2 million tonne expansion project at its Vijayanagar plant in Karnataka by the end of the current fiscal.

 

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First Published: Dec 13 2010 | 3:49 PM IST

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