JSPL to take control of Gujarat NRE Coke’s Australian arm

Our Bureau Kolkata | Updated on March 12, 2018

Jindal Steel & Power Ltd (JSPL) is set to take management control of Gujarat NRE Coking Coal Ltd (GNCCL) but there will be no change as of now to the supply of coking coal from the latter’s two mines in Australia.

According to sources, JSPL will take control of the management some time soon. “Immediately, we are placing a representative on the GNCCL board,” said a top Jindal group source.

GNCCL is an Australian metallurgical coal asset subsidiary of Kolkata-registered Gujarat NRE Coke which, along with other entities, holds a controlling 63.95 per cent.

The sources said that as JSPL gets a measure of GNCCL’s management, changes will be made.

JSPL would look at the operational matrix of the two mines. JSPL is also entering into fresh offtake agreements, cancelling the old ones.

JSPL, which through two offshore entities holds 31.49 per cent in GNCCL, is investing A$45 million by subscribing to a fresh equity issue of 328.5 million shares at A$0.20 a share. This will take its stake in GNCCL to 44.68 per cent.

Conversion of another 328.5 million options within the next five years will push up JSPL’s holding in the Australian Stock Exchange-listed GNCCL to 53.62 per cent without any additional consideration.

JSPL is also investing in convertible notes. JSPL (Mauritius) has already given an advance of over A$16.61 million to GNCCL, which had reported a loss (after tax) of A$76.60 million.

The funds are to meet the working capital needs and retire some debt.

The Re 1 JSPL stock closed at Rs 255.60, up over one per cent, on the BSE on Friday.

The Rs 10 Gujarat NRE Coke counter was also up marginally at Rs 13.35.

Published on October 18, 2013

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