New Delhi: JFE Steel Corporation of Japan will invest Rs 15,750 crore to form a joint venture with Sajjan Jindal-led JSW Steel, according to a regulatory filing.
The joint venture (JV) will include JSW Steel’s arm Bhushan Power & Steel Ltd’s (BPSL) integrated steel plant, situated in Odisha.
In a BSE filing, JSW Steel said it has “entered into a strategic joint venture partnership with JFE Steel Corporation, Japan (JFE).
The steel business undertaking of Bhushan Power and Steel Ltd (BPSL) will be transferred to a 50:50 joint venture with JFE through a slump sale, with a cash consideration of Rs 24,483 crore.
JFE will invest Rs 15,750 crore in two tranches to acquire a 50 per cent stake in the joint venture, it added.
JSW Steel had acquired BPSL in 2021 through Insolvency and Bankruptcy Code (IBC) process and successfully transformed it from a 2.75 2.75 million tonnes per annum (MTPA) distressed unit into a profitable company with an expanded capacity of 4.5 MTP, currently employing 25,000 people.
Through this transaction, JSW will monetise part of its stake in BPSL to accelerate its overall growth strategy.
As part of this, the company will bring in JFE as a trusted, long-term strategic partner, whose technological expertise combined with JSW Steel’s strong project execution and operational capabilities will unlock additional value for the joint venture.
“Today’s announcement brings together JSW’s expertise in India with JFE’s technological strengths, and will enable the joint venture to realise its growth potential and produce a variety of value-added steels,” JSW Steel Ltd Joint Managing Director and CEO Jayant Acharya said.
JSW will maintain its investment and continue to participate in value creation within the partnership going forward, the filing said.
“I am confident that by leveraging our technological strengths and jointly operating an integrated steel plant in India with JSW, we will not only contribute to the further growth of both companies but also make a significant contribution to the development of the Indian steel industry,” President and CEO of JFE Steel Corporation Masayuki Hirose said.
PTI