August 22, 2008

JSW Steel to raise up to USD 500 million through GDR issue

PTI reported that following merger with Southern Iron and Steel Company, JSW Steel now plans to raise up to USD 500 million through a GDR issue in order to bring more liquidity to the company's stock.

Mr Sajjan Jindal vice chairman & MD of JSW Steel told PTI that "We are looking at secondary listing through a Global Depository Receipts issue other than India in which we plan to raise USD 300 million to USD 500 million. This will help us to expand the investors' base and bring more liquidity to the company's stock. This raising through a GDR issue is the best way we can do without diluting equity. The idea is to give more liquidity to the company's stock.”

Mr Jindal added that "With Siscol's merger, the market cap would be nearly about USD 4.5 billion to USD 5 billion and is now coming to that size, where it can be listed overseas.”

JSW had acquired government owned SISCOL in 2004, which produces round and long products for construction and engineering applications. Following SISCOL merger, at a swap ratio of 22:1, the promoters' stake in the merged would be around 45%. SISCOL currently manufactures 0.3 million tonnes of specialized steel. Mr Jindal said that "Siscol will produce 1 million tonne of steel from January next year. There is a possibility to take it to 2 million tonnes."

The management's plan to opt for a secondary listing through a sponsored global depository receipts issue would not dilute the equity, Jindal said, but did not give a time frame for the listing.