Steelmaker JSW joins race to buy Stemcor's iron assets

NEW DELHI/LONDON Wed Jul 24, 2013 8:11pm IST

A labourer works inside an iron factory on the outskirts of Jammu October 1, 2012. REUTERS/Mukesh Gupta/Files

A labourer works inside an iron factory on the outskirts of Jammu October 1, 2012.

Credit: Reuters/Mukesh Gupta/Files

Related Topics

Stocks

   

NEW DELHI/LONDON (Reuters) - JSW Steel (JSTL.NS), India's third-largest steelmaker, has expressed interest in buying British steel trader Stemcor's Indian iron ore assets, joining at least three other interested parties, two sources at the companies said.

Among the other firms interested, is steelmaker Jindal Steel and Power (JNSP.NS), a firm run by Member of Parliament Naveen Jindal, brother of JSW Steel's boss Sajjan Jindal.

Their late father, businessman and politician Prakash Jindal founded the Jindal group, a steel and power empire made of various companies that Naveen, Sajjan and their two brothers now run.

"We are in talks but nothing has been finalized. We sent a letter to Stemcor to convey to them interest," said a source at JSW who spoke on condition of anonymity.

Stemcor declined to comment on the sale.

A JSW spokesman said he would not comment on any specific proposals but added:"JSW Steel's business strategy is to increase its backward integration in securing iron ore and coking coal to feed its steel plants in India. The company continuously scans and evaluates various proposals of strategic interest."

Stemcor, the world's largest independent steel trading company and the fifth-largest private company in Britain is undergoing a restructuring phase.

The firm, controlled by the Oppenheimer family, has come under pressure from lenders to sell some of its assets to raise cash, since it failed to refinance a $850 million syndicated loan that was due to mature in May.

Stemcor appointed Goldman Sachs to find a buyer for its Indian assets which include a iron ore mine and iron processing facilities in the state of Odisha, valued by an industry source at about $700-750 million.

Goldman Sachs was not immediately available to comment on the appointment.

Jindal Steel and Power CEO Ravi Uppal said in an interview on Tuesday that it sees its iron ore needs trebling by 2015 and confirmed its initial interest in the Stemcor assets.

"The whole thing is at a very early stage. We are looking how this proposal makes sense to us," he said.

JSW posted revenue of about $6.4 billion in the latest financial year while Jindal Steel and Power registered a turnover of about $3.3 billion.

Stemcor, which trades between 15 million and 20 million tonnes a year of steel and steel raw materials, including coal and iron ore, posted a 5.1 billion poundsturnover last year.

(Editing by William Hardy)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Culling Plans

REUTERS SHOWCASE

Drug Approval

Drug Approval

Epirus, Ranbaxy win India approval for arthritis drug copy.  Full Article 

Fresh Demand

Fresh Demand

As mining curbs bite, India offers market to glut-hit iron ore.  Full Article 

Root Out 'Bad Apples'

Root Out 'Bad Apples'

RBI chief calls for cleaning up of banking system.  Full Article 

Android One

Android One

Google launches $105 Android One; eyes low-price smartphone boom.  Full Article 

Cognizant Deal

Cognizant Deal

Cognizant to buy TriZetto for $2.7 billion to boost healthcare business  Full Article 

India-Vietnam Ties

India-Vietnam Ties

India tightens Vietnam defence, oil ties ahead of China Xi's visit.  Full Article 

Antitrust Crusade

Antitrust Crusade

INSIGHT - "Mr. Confession" and his boss drive China's antitrust crusade .  Full Article 

Inflation Eases

Inflation Eases

Aug WPI inflation eases to near five-year low of 3.74 percent  Full Article 

Kashmir Floods

Kashmir Floods

Disease threatens as Kashmir flood waters turn fetid  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage