The deal envisages Ispat Industries to issue 108.66 crore equity shares on a preferential basis at Rs 19.85 per share and in addition, JSW will make an open offer to minority shareholders of Ispat as per SEBI guidelines.
Ispat Industries’ founder will retain 26 per cent equity in the company, while JSW will be holding a stake of 41.29 per cent on completion of the preferential allotment, prior to the open offer to be made. Briefing reporters, JSW Steel Chairman Sajjan Jindal said JSW sees strong synergies with Ispat.
The acquisition will make JSW one of largest steel producers in the country with its production to reach 14.3 mtpa by March 2011.
JSW Executive Director Jayant Acharya said the company plans to open Ispat’s Mumbai plant by mid-January 2011. Ispat’s production capacity stands at 3.3 mtpa which could be ramped up to 4.2 mpta with some debottlenecking of existing facilities. Ispat has been a loss-making unit for quite sometime now with a huge debt .