JSW Steel acquires Welspun Maxsteel

 JSW Steel has entered into a definitive agreement with Welspun Enterprises Ltd. (WEL), pursuant to which the company shall acquire the entire equity shares held by WEL in Welspun Maxsteel Ltd. (WMSL) for an enterprise value of Rs 1,000 crore plus net current assets as of an agreed date of 31st August 2014. Seshagiri Rao, Joint MD and Group CFO, JSW Steel commented, “This acquisition is value accretive to JSW Steel due to synergies in supplying surplus pellets to Welspun MaxSteel and use of DRI from WMSL in company’s steel-making operations at Dolvi plant.” WMSL has an installed capacity of 0.9 MTPA gas based DRI plant, with a captive jetty and a captive railway siding. DRI plant is located in Salav village in Raigad district of Maharashtra. Captive jetty has an existing capacity of 2.5 MTPA which is located at 1.8 km from the plant, while the captive railway siding is located at Roha junction on national Konkan Railway, 35 km from the DRI plant. WMSL also has vacant land of approx. 480 acres, available for future expansions.  JSW Steel has surplus pellets in its subsidiary Amba River Coke Ltd which will be supplied to WMSL. The cost of production in WMSL is expected to come down due to replacement of significant portion of its bought-out pellets with captive pellets. The DRI produced by WMSL shall initially be used partly by JSW’s Dolvi unit, and would be consumed in the entirety post completion of its ongoing expansion to 5 MTPA, the company informed. 

21