JFE to buy 14.99% in JSW Steel
Japanese steel maker JFE has decided to invest Rs. 4,800 crore in Indian steel manufacturer JSW Steel for acquiring 14.99 per cent stake in the latter, JSW Steel said in a filing to the Bombay Stock Exchange on Monday.
The amount received from JFE will help JSW Steel to reduce its existing debt burden.
As per the agreement between the companies, the Indian company will issue JFE 32,004,798 ordinary equity shares at Rs. 1500 per share by August 31, 2010, the company filing informed.
However, issue of equity shares is subject to the condition that it would take place only if average closing price of JSW Steel in two consecutive weeks or 10 consecutive days or the closing price of the company in five consecutive days touches or exceeds Rs. 1,365. Otherwise JFE will be issued a single fully convertible debenture with a face value of over Rs. 4, 800 crore.
Commenting on the agreement Vice Chairman and Managing Director of JSW Steel Sajjan Jindal said that the agreement would help the company move a step forward in the steel production value chain and it would also help the company to face the cyclical challenges which are inherent to the steel industry.
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