JSW Steel acquires Neotrex Steel
JSW Steel has acquired Neotrex Steel, an under-construction project to produce Low Relaxation Pre-Stressed Concrete (LRPC) strands, from the JSW Group promoters’ owned company Everbest Consultancy Services. Everbest Consultancy Services is wholly owned by Sajjan Jindal Family Trust.
JSW Steel will make a strategic investment of ₹96 crore in the under-construction project to set up 1.44 lakh tonne per annum LRPC strands with an investment of ₹340 crore. The project is expected to be completed by April 2023.
The project is being funded by ₹120 crore of equity and compulsory convertible debentures and remaining ₹220 crore will be tied-up through external borrowings. JSW Steel will be contributing to 80 per cent equity and CCDs aggregating to ₹96 crore. LRPC strands are used in almost all types of heavy-duty industrial construction, high rise buildings and infrastructure projects.
JSW Steel board approved the acquisition of 51 per cent stake in Neotrex Steel from Everbest Consultancy Services and its wholly owned subsidiary Neotrex Steel Wires by way of equity share and zero-coupon CCDs at ₹11 crore, said the company.
Following this, JSW Steel infused ₹33 crore in Neotrex Steel and received equity shares worth ₹1.45 lakh and zero-coupon CCDs of ₹32.54 crore, issued at par. JSW Steel now owns 80 per cent in Neotrex Steel and made it a wholly-owned subsidiary. “JSW Steel will invest another ₹52 crore in one or two tranches by way of equity and CCDs during the project period,” it said.
This is the second investment of JSW Steel in promoters-owned company. Earlier, an investment of ₹750 crore by JSW Steel in unlisted Group promoters owned JSW Paints in four tranches had raised investors’ concern. As part of the first tranche, it had already invested ₹300 crore to acquire 6.88 per cent equity shares in JSW Paints.
Story Credit: The Hindu Business Line