JSW Energy acquires stake in South African Coal

JSW Energy acquires stake in South African Coal
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First Published: Fri, Apr 16 2010. 10 46 PM IST

Foreign interests: JSW Steel chairman Sajjan Jindal had earlier said the firm may spend $500 million on coal mines overseas. Abhijit Bhatlekar/Mint
Foreign interests: JSW Steel chairman Sajjan Jindal had earlier said the firm may spend $500 million on coal mines overseas. Abhijit Bhatlekar/Mint
Updated: Fri, Apr 16 2010. 10 46 PM IST
New Delhi: JSW Energy Ltd, a unit of India’s third largest steelmaker, has acquired a part of a company that owns shares in South African Coal Mining Holdings Ltd.
JSW Energy’s shares climbed 3.85% in Mumbai on Friday.
The Indian power utility acquired a 49.8% stake in Royal Bafokeng Capital (Proprietary) Ltd from Strider Holdings (Proprietary) Ltd and has the option of buying the remaining 50.2% from Royal Bafokeng Ventures Proprietary Ltd, JSW said in a statement.
JSW Energy can also opt to buy the entire shareholding in Mainsail Trading 55 (Proprietary) Ltd, another investor in South African Coal, from RBH Resources Holding (Proprietary) Ltd, according to the statement.
Foreign interests: JSW Steel chairman Sajjan Jindal had earlier said the firm may spend $500 million on coal mines overseas. Abhijit Bhatlekar/Mint
Royal Bafokeng Capital and Mainsail collectively hold a majority stake, or around 284.6 million shares, in South African Coal.
JSW Energy’s parent company, JSW Steel Ltd, may spend $500 million (Rs2,225 crore) buying coal mines in countries including South Africa and Australia to secure supplies for expansion in India, JSW Steels’ managing director Sajjan Jindal had said in an interview in November.
The purchase price of the stake is equal to 30 cents for each share held indirectly by Strider in South African Coal, according to JSW Energy. A similar rate will apply should JSW choose to buy additional shares.
JSW Energy shares rose to Rs120.10 on Friday, the highest closing level since 4 January, when the stock started trading after the company raised Rs4,500 crore in an initial public offering.
Meanwhile, South African Coal had its listing suspended in Johannesburg, South Africa, after failing to submit a provisional earnings report, according to a stock exchange statement on 4 May. The stock closed unchanged at 41 cents on 30 April, valuing the company at 178.9 million rand (around $24 million).
The miner on 9 April had posted a loss of 94.2 million rand for the year to 31 December, compared with a net income of 111.9 million rand a year earlier.
South African Coal said last year it suspended operations for three months because of lower coal prices and difficult operational conditions. The company said on 30 March it had received an offer from Wescoal Holdings Ltd to acquire its entire issued share capital.
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First Published: Fri, Apr 16 2010. 10 46 PM IST