Announcing its entry into tinplate business, JSW Steel today said it will acquire 50 per cent stake in Punjab-based Vallabh Tinplate Pvt Ltd (VTPL) for about Rs 46 crore.
The deal will be completed in two phases, JSW said in a BSE filing. Of this, the company will acquire 26 per cent stake in VTPL immediately and shall increase its stake to 50 per cent in due course, it said.
"The total investment to acquire 50 per cent equity stake in VTPL is estimated to be a maximum of Rs 46 crore depending upon financial performance of VTPL.
"Accordingly JSW Steel has executed a legally binding share purchase agreement and shareholders agreement with the shareholders of VTPL and VTPL," JSW said in the filing.
VTPL, owned by Vardhaman Industries Ltd, has a 60,000 tonnes per annum tinplate manufacturing facility in Punjab's Patiala district.
The acquisition marks JSW Steel's entry into growing Tinplate business in India, the company said, adding, it will have representation in the Board of VTPL proportionate to its equity holding with a right to appoint certain key managerial personnel.
Tinning is the process of thinly coating sheets of wrought iron or steel with tin, and the resulting product is known as tinplate. It is most often used to prevent rust.
JSW Steel is a leading domestic steel manufacturer with an installed capacity of 14.3 million tonnes. It has a strategic goal to enhance its share of value added products segment in the overall product basket to about 40 per cent, the company said.
