JSPL stakes up in Gujarat NRE8217;s Oz arm

Gujarat NRE will also sell 2 lakh tonnes of raw coal run-of mine coal annually to JSPL.

Jindal Steel and Power has picked up additional 2.67 per cent stake in GNCCL 8211; Gujarat NRE Coal8217;s Australian subsidiary 8211; for AUD 7.5 million about Rs 43.44 crore,taking its holding to 12.74 per cent.

In May,the Naveen Jindal-led firm had acquired 10.07 per cent stake in Gujarat NRE Coking Coal Ltd GNCCL,for about AUD 25 million about Rs 135 crore.

In a statement,GNCCL said that the funds from the share sale will be used for expanding the capacity of two coking coal mines to 6 million tonnes per annum MTPA.

8220;The securing strong off-take partners is important as we continue the expansion of our two mines to our planned levels of over 6 MTPA and the placement funds will be utilised in our expansion project,8221; the company8217;s Executive Chairman Arun Kumar Jagatramka said in the statement.

Besides,Gujarat NRE will also sell 2 lakh tonnes of raw coal run-of mine coal annually to JSPL at a benchmark linked price.

8220;As part of the agreement,the company will issue and allot a further 30,000,000 fully paid ordinary shares to Jindal Steel amp; Power Mauritius Limited at AUD 0.25 per share raising AUD 7,500,000,8221; it added.

Jindal Steel amp; Power Mauritius is the Mauritius-based subsidiary of JSPL. Going by the total issued shares at 1,12,31,37,858 of GNCCL,today8217;s transaction amounts to 2.67 per cent share sale to the Naveen Jindal-led firm.

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According to Gujarat NRE,this share sale represents a premium of about 47 per cent to the current market price of GNCCL,which is listed at the Australian Securities Exchange.

While acquiring stake in GNCCL in May,JSPL had also signed a long term contract to buy 5 million tonne of coking coal over a 10-year period from the Australian subsidiary of Gujarat NRE. The company also has the option to increase its purchase further by additional 5 lakh tonne in a year.

Of late,JSPL has been on acquisition mode. In last four months,the firm has made two strategic investments in Australian natural resource assets by acquiring 9.25 per cent stake in Apollo Minerals and 10.07 per cent stake in GNCCL.

Last month,it had entered into a deal to acquire Canada8217;s CIC Energy,which has 2.6 billion tonne of high quality thermal coal mines in Botswana,for over Rs 600 crore.

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Gujarat NRE8217;s Australian subsidiary operates two coking coal mines in southern coal fields of New South Wales,Australia. Both the mines are estimated to have total coking coal reserves of 125 MT and resources of 651 MT.

Shares of Gujarat NRE closed unchanged at Rs 16.75 apiece on the on BSE,while JSPL scrip was up 0.88 per cent at Rs 407.15.