JSW Steel keen on acquiring stressed assets

To create $1 billion war chest

JSW Steel keen on acquiring stressed assets

Leading alloymaker JSW Steel is evaluating stressed steel assets for acquisitions and has secured shareholders approval to create a $1 billion war chest for the same, a top company official said on Thursday.

“We will look at all those assets which are stressed from an opportunity point of view and as long as they are value-accretive to shareholders,” JSW Steel chairman and managing Director Sajjan Jindal told reporters on the sidelines of the company’s annual general meeting here.

Jindal said the company on Thursday received shareholders’ approval for an enabling resolution to raise $1 billion in foreign currency convertible bonds or through ADR/GDR.

Last week, a consortium, led by State Bank of India, sent three large non-performing accounts — Bhushan Steel, Essar Steel and Electrosteel Steels — to the National Company Law Tribunal for insolvency proceedings. These three companies owe Rs 1 lakh crore of unserviced debt to banks.

“I don’t want to name any company as of now, but whichever asset is value-accretive to us, whichever assets we feel as good, we will evaluate them,” Jindal said, adding there are many takers for these stressed assets and the steel industry is today a very exiting place to be in.

On the foreign currency fund raising, he said, “Since there are a lot of stressed assets and the global steel industry is also in bad shape, we feel that there could be opportunities at any given time, where we will not get much time to act.

“Therefore, we always make it to have an enabling resolution to have a war chest ready so that as and when we spot an asset we can snap them up.”

But Jindal was quick to add that “as of now we have no real plans of diluting our equity.”

Jindal admitted that the company’s experience with overseas investments have not been very good. Therefore, it will be very careful over overseas investment.

The company has outlined a capex programme of Rs 26,800 crore to expand overall steel making capacity to 23 million tonnes per annum by March 2020, Jindal said.

The compnay also plans to increase its downstream flat steel capacity to seven million tonnes per annum by September 2019, along with a few other strategic projects, he added.

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