Markets

JSW Steel plans LSE listing of foreign assets

PTI New Delhi | Updated on March 12, 2018 Published on August 05, 2012

Sajjan Jindal-led JSW Steel plans to consolidate its international operations under one roof and list them on the London Stock Exchange (LSE), sources said.

The consolidation and then listing on the LSE are likely to happen by the end of the current financial year or thereafter and will depend on market conditions, they said.

Company officials could not be reached for comments.

Vedanta Resources and Essar Energy are two other Indian firms that are listed on the LSE.

JSW, which is one of the largest domestic steel producers, operates a pipe and plate mill in the United States and has coal and iron ore mines in the US, Chile, Mozambique and Kenya.

JSW Netherlands, a wholly owned subsidiary, is the holding firm of most of the overseas ventures of the Sajjan Jindal led firm.

“One of the major targets (before listing) was some major overseas entities turning profitable. That has started happening. The pipe and plate mill in the US and iron ore mining operation in Chile have reported positive earnings in terms of EBITDA in last 2-3 quarters,” a source said.

Stating that JSW has not yet appointed the investment bankers to initiate the process, the source further said that the proposed listing is aimed at expanding company’s international presence and not leveraging the parent company in terms of raising debt for overseas operations.

As per the JSW’s official figures, the US Plate and Pipe Mill, which has a production capacity of 1.2 million tonnes of carbon steel plates and 2.5 lakh tonnes of pipes, has reported a gross profit (EBITDA) of $6.39 million in April-June quarter. In 2011-12, its gross profit was $42.56 million.

Besides, the iron ore operations at Chile had positive earnings before interest, tax, depreciation and amortisation (EBITDA) of 8.48 million in the last quarter. In 2011-12, the Chile operations’ gross profit was $0.89 million.

Moreover, the company also has a mining licence in Mozambique for exploration of coal and iron ore and it has an agreement with Kenyan government for mining manganese ore. It also has a steel making joint venture in Georgia.

Since August last year, the Sajjan Jindal-led firm has been going through a tough phase as it has been hit hard by iron ore crisis in Karnataka, higher interest rates and volatility in rupee.

The three factors cumulatively had a severe impact on company’s earnings in the last fiscal. Even for the April-June quarter, JSW’s consolidated net profit went down to Rs 50 crore due to forex losses of Rs 592 crore.

Published on August 05, 2012
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