JSW Steel on Monday said it has entered into a definitive agreement to acquire Welspun Maxsteel asset for Rs 1,000 crore. As per the deal, Sajjan Jindal-promoted JSW Steel would acquire the entire equity shares held by sponge iron maker Welspun and its net current assets.
Welspun has an installed capacity of 0.9 MTPA gas based direct reduced iron (DRI) plant, with a captive jetty and a captive railway siding at Raigad in Maharashtra. The DRI produced by Maxsteel will make their way into JSW Steel’s plant at Dolvi plant, also at Raigad.
This is the third big-ticket M&A deal in the past month with Adani Power, last week, announcing that it was buying debt-strapped Lanco Infratech’s 1,200 MW Udupi power plant for more than Rs 6,000 crore. The Adani deal was preceded by Reliance Power signing a pact to acquire three hydel projects of the Delhi-based Jaypee Group.
Under the all-debt JSW Steel-Welspun Maxsteel deal, the steel maker will take over the debt of Welspun. Welspun Maxsteel has a debt of Rs 1,030 crore on its books.
Commenting on the buyout, joint MD and CFO of JSW Group, Seshagiri Rao, said, “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.”