Gujarat NRE Coking Coal Ltd (GNM), the Australian subsidiary of Gujarat NRE Coke Ltd, has roped in Jindal Steel & Power Ltd as a customer for coal supply.
GNM would also place substantial quantum of new shares in favour of Jindal Steel & Power (Mauritius) Ltd at a hefty premium to its current market price.
In a communication to the stock exchanges, Gujarat NRE Coke Ltd said that its Australian subsidiary had entered into an Option Off Take agreement with Jindal Steel & Power Ltd under which the Australian company would supply 5 million tonnes of coal over a 10-year period.
The agreement provides for an annual offtake of 500,000 MTPA of Run of Mine (ROM) coal with the option for additional supply of 500,000 MTPA at benchmark linked price.
Allotment of shares
It would also place 100,000,000 full paid ordinary shares at $0.25 per share, representing a near 48 per cent premium to the last traded market price of the GNM scrip at $0.17 on May 25, in favour of Jindal Steel & Power (Mauritius) Ltd.
The shares were being issued under the 15 per cent placement limit available and it is expected to be completed by May 30.
Mr Arun Kumar Jagatramka, Executive Chairman, GNM, describing it as a ‘win-win’ deal for both parties, said it offered secured supply of premium hard coking coal to Jindal Steel even as it diversified the customer base of the company.