JSW Steel Ltd to acquire steel facilities at Piombino

JSW Steel Ltd's subsidiary, JSW Steel Italy S.r.l., has entered into a Share Purchase Agreement("SPA") dated 21st December 2020 with Industrial Development Corporation("IDC"), South Africa. IDC is owned by the Government of South Africa under the supervision of the Department of Trade Industry and Competition. SPA is for acquisition of 30.73% share capital of GSI Lucchini S.p.A ("GSI") for a cash consideration of Euro 1 Million ("Transaction"). The Transaction is subject to fulfilment of conditions precedent and other terms mentioned in the SPA.

Balance Share Capital of 69.67% of GSI is held by JSW Steel Italy S.r.l. Manufacturing unit of GSI is located in Piombino, Tuscany Region, Italy.

Background

GSI is a producer of forged steel balls used in grinding mills with predominant application in mining processing. GSI facilities are located within the premises of Piombino plant, providing easy access to export markets through the port of Piombino.

Acquisition Rationale

- In summary, the proposed Transaction provides a unique opportunity for JSW to consolidate its stake in GSI.

- The GSI Lucchini brand is widely recognized in Europe and Africa and is among the prominent Grinding Media supplier in African Mines.

- The port based facility located at Piombino, makes GSI uniquely positioned for exports market, which allows specific advantages in terms of lead time, service level, and logistics cost in its target markets.

- The port based facility also gives GSI the flexibility and access to import raw material's bars/blooms and billets to supplement supplies as when required.

Shares of JSW STEEL LTD. was last trading in BSE at Rs.351.75 as compared to the previous close of Rs. 364.45. The total number of shares traded during the day was 517822 in over 5679 trades.

The stock hit an intraday high of Rs. 368.2 and intraday low of 344.05. The net turnover during the day was Rs. 184670077.

Source : Equity Bulls

Keywords