JSW Steel Ltd, the third largest Indian steel maker, today said it has deferred the proposed acquisition of Italy’s Lucchini SpV.
“For the time being, plans for India is much stronger and larger. We want to focus in India.... We have deferred our decision to invest in the Italian project,” JSW Steel Chairman and Managing Director Sajjan Jindal said here on Sunday.
He was speaking on the sidelines of inauguration of Ispat Pragati Bhawan, the new office of Institute of Steel Development & Growth (Insdag) in the city.
In September, Jindal had told reporters that JSW has offered less than $100 million for three mills of the insolvent Lucchini and it was in a position to win it.
The company recently also gave a clarification in the bourses saying, “In line with our long term strategy to acquire finishing mills near to the market, we have submitted a binding bid for takeover of Rolling Mills of the Piombini Plant of Lucchini in Italy subject to certain terms and conditions. We are yet to get the response on this bid.”
Lucchini, with a steel capacity of about 2.5 mt, was owned by Russia’s Severstal but had to be declared insolvent in 2012 following which the government placed it under special administration and started the process to find buyers.
Bengal project on hold
JSW Steel has also put its West Bengal steel and power plant on ‘hold’ over uncertainty of raw material linkages for the proposed Rs 35,000 crore project.
“We have put the project on hold. Without both raw material (coal and iron—ore) it is very difficult to go ahead with the project,” Jindal said.
He said as JSW Bengal has already invested Rs 700 crore into the project at Salboni, in West Midnapur, it was keen about the project but given the unclear situation about coal and iron-ore it was not practical to go ahead with the project.
JSW Bengal currently does not have either coal or iron-ore linkages for the Salboni project.
However, Jindal said they will bid for the three coal mines, if put on auction, which were offered by the West Bengal government agencies for the proposed 10 million tonne integrated steel plant.
Asked whether JSW will go ahead with the power project in case it won back the coal mines, Jindal said everything will be looked afresh and definitely “We have hope and desire to build industry here (Bengal).”
He says even Bellary’s plant situation is better as it has atleast 50 per cent of iron—ore linkages and setting up a slurry pipeline to pump imported iron—ore into plant was not feasible.
JSW was awaiting “minor changes” in its agreement with the West Bengal government before kick—starting construction at its 600 MW power plant at Salboni.
JSW had proposed to sell power to state utilities to the tune of 60 per cent of the generation capacity but West Bengal government had scrapped the power purchase agreement.
The other demand was to change in agreement to allow use of captive coal for power generation.
JSW currently has a total installed steel making capacity of 14.3 million tonnes in India.