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JSW Steel has entered into a definitive agreement to acquire Welspun Max Steel (WMSL) asset for Rs 1,000 crore.
WMSL has an installed capacity of 0.9 MTPA gas-based direct reduced iron (also known as sponge iron) plant, with a captive jetty and a captive railway siding. The pellet plant is located at Salav village in Raigaddistrict, Maharashtra. Captive jetty has capacity of 2.5 mtpa which is located at 1.8 km from the plant, while the captive railway siding is located at Roha junction on national Konkan Railway, 35 km from the DRI plant. It also has surplus land of about 480 acres, available for future expansions.
JSW has entered into an agreement with Welspun Enterprises to acquire the entire equity shares held by it in WMSL for an enterprise value of Rs 1000 crore as of an agreed date of August 13, subject to the relevant regulatory approvals, said JSW Steel in a press release on Monday.
JSW Steel an installed capacity of 14.3 mtpa. WMSL is situated within 40 kms from JSW’s Dolvi unit, offering complimentary infrastructure and location to augment the current envisaged expansions at Dolvi.
Seshagiri Rao, Joint MD & Group CFO said, the acquisition is value accretive to JSW Steel due to synergies in supplying surplus pellets to Welspun MaxSteel and use of direct reduced iron from WMSL in company’s steel-making operations at the 5 mtpa Dolvi plant.
JSW has surplus pellets in its subsidiary Amba River Coke which it intents to supply to WMSL and bring down its cost of production.
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