JSW to buy 49% in Brahmani River Pellets for ₹1,200 crore

Suresh P Iyengar Mumbai | Updated on March 12, 2018

Sajjan Jindal, CMD, JSW Group

Tata Steel had called off similar deal to acquire the company

JSW Techno Project Management, part of the JSW Group, has signed a definitive agreement with Aryan Mining and Trading Corporation to acquire a 49 per cent stake in Odisha-based Brahmani River Pellets for about ₹1,200 crore, said sources.

Incidentally, Tata Steel had signed a similar agreement to acquire a stake in Brahmani River Pellets for ₹900 crore in December 2016, but called off the deal the following year citing delays in getting government approvals.

Brahmani River Pellets’ assets include a four-million-tonne per annum (mtpa) pellet plant at Jajpur, 4.7 mtpa iron ore beneficiation plant at Barbil (both in Odisha) and 230-km slurry pipeline connecting the pellet plant with the beneficiation unit.

Aryan Mining and Trading Corporation, which is part of the Moorgate Industries Group, was set up to hold the Indian iron ore assets of debt-ridden UK steel trader Stemcor Group.

JSW Techno Project, a promoter-owned private limited company, is eyeing a significant minority stake in Brahmani River Pellets to take advantage of the merchant pellet business, sources said.

The Sajjan Jindal-led JSW Group is bidding for stressed assets of Bhushan Steel and Monnet Ispat to increase its capacity to 45 mt by 2030. JSW Steel recently formed a wholly-owned subsidiary, JSW Utkal Steel, to fast-track implementation of its 12 mt steel plant and other inter-linked projects in Odisha with an investment of ₹55,000 crore.

The integrated steel mill will have a 900-MW captive power plant, a 32 mt pellet unit, a captive port and a slurry pipeline to transport iron ore concentrates from Joda to the project site proposed near Paradip.

Earlier, Tata Steel had signed an agreement with Moorgate Industries Group to acquire a stake in Brahmani River Pellets. The deal was part of a UK-court driven restructuring process of Stemcor in 2015, when global steel prices crashed due to excess production in China. Moorgate owns part of Brahmani River Pellets through Aryan Mining and Trading Corporation, which is also part of the transaction.

Published on December 18, 2017

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