Business

Jindal Steel buys Omani firm

In a strategic move aimed at extending the presence of the company overseas, Naveen Jindal-owned Jindal Steel and Power Limited (JSPL) on Thursday announced the acquisition of Oman-based Shadeed Iron and Steel Co for $464 million.

In a statement issued here, JSPL said it had concluded the buyout agreement on Wednesday with UAE's Al Ghaith Holdings, which owns the target firm.

Subsidiary

JSPL, through its 100 per cent subsidiary Jindal Steel and Power (Mauritius) Ltd has decided to acquire Shadeed Iron & Steel Co (Shadeed), it said. “A definitive share purchase agreement (SPA) and other transaction documents have been signed at $464 million, including the assumption of liabilities,” it added.

Financing

The company said it has tied up $400 million in debt financing from international banks and the balance will come from internal accruals.

Gas-based unit

JSPL Director Sushil Maroo said: “The acquisition is part of our plans to expand operations overseas. It is a gas-based unit. We are also setting up 2 million tonnes per annum gas-based unit in India. It is a strategic fit for us. It will mark our first overseas presence in the steel space.” JSPL had recently acquired several coal and iron ore mines in Africa and Bolivia.

Middle East market

With Shadeed's acquisition, the company aims to tap the burgeoning construction and infrastructure market of the Middle East.

“There is a strong demand for steel in the Middle East and North African countries, with a supply shortfall estimated to be over 15 million tonnes,” it added. Shadeed is setting up a 1.5 million tonnes per annum gas-based steel plant at Sohar Industrial Port area, Oman.

“This is a tremendous acquisition for JSPL as the facility is engineered by Kobe Steel and Midrex, leaders in the field of direct iron technology, and Jindal Steel believes the facility can be made operational within a year. This is also the same technology Jindal Steel and Power will be using in its Orissa facility, and the additional experience will help bring this new facility on stream in a timely manner, the statement added.


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Printable version | Jan 18, 2022 9:27:59 PM | https://www.thehindu.com/business/Jindal-Steel-buys-Omani-firm/article16302233.ece

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