Markets

JSW Steel defers open offer to Ispat Ind

Our Bureau Mumbai | Updated on February 07, 2011

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JSW Steel announced on Monday that it has revised the dates of its open offer to pick up an additional 20 per cent stake in Ispat Industries.

The open offer to buy about 64.7 crore shares (face value of Rs 10 a piece) in Ispat was supposed to open February 12 and close March 3.

“The date of opening of the offer and other relevant dates mentioned in the public announcement under ‘schedule of the activities pertaining to the Offer' will undergo a change and the revised schedule of activities will be announced separately after receiving SEBI's approval to the letter of offer,” the company said in a notice to the exchanges.

JSW Steel, in December 2010, had acquired 41.29 per cent for Rs 2,157 crore in Ispat Industries at Rs 19.85 a share.

JSW Steel was to acquire 20 per cent of Ispat at Rs 20.54 a share for a total of Rs 1,329 crore.

Loss-making Ispat has 3.3 million tonnes HR capacity, backed by 1.6 million tonnes DRI (direct reduced iron) and two million tonnes blast furnace capacities. The company, based at Raigad in Maharashtra, has a capacity utilisation of 80 per cent and generates an EBITDA of Rs 3,150 a tonne. Though Ispat has key raw material backing, it was not able to develop them due to a financial crunch.

JSW has outlined a capex spend of Rs 3,100 crore over the next couple of years to set up a 110-MW captive power plant, implement the 3 mtpa pellet plant, expand steel production capacity from 3.3 to 4 mtpa and a 1 mtpa coke plant.

Enam Securities are the managers to the issue.

The shares of JSW Steel closed marginally up by 0.07 per cent at Rs 897.4 on BSE on Monday. Ispat Industries was down by 0.41per cent at Rs 24.25.

Published on February 07, 2011

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