JSPL acquires 9.25% stake in Australia's Apollo Minerals
Deal, which will be completed this week, is not to subject to regulatory approvals from any Australian or state govt agency
Jindal Steel and Power Ltd (JSPL) has acquired a 9.25% stake in Australia's Apollo Minerals for AUD 1 million (about Rs 5.30 crore).
"JSPL is making a significant investment in Apollo. This initial investment, facilitated by Bligh Capital Pty Ltd, will provide JSPL with 9.25% of the total issued shares in Apollo," the Australian company said in a statement.
It added that the deal will be completed this week and is not to subject to regulatory approvals from any Australian or state government agency.
Before this acquisition, the Naveen Jindal-led firm's presence in Australia was limited to the coal sector with six exploration permits in Queensland and 27.27% stake in Rockland Richfield.
The Australian firm is an iron ore and minerals explorer and developer, having Commonwealth Hill project in South Australia and Mount Oscar Project in the Pilbara region of Western Australia.
"Since we gained access to the Commonwealth Hill Iron project in October 2011, Apollo has added value to the project through exploration and is now adding more value by attracting an investor of the size and quality of JSPL," Apollo's Chief Operating Officer Dominic Tisdell said in the statement.
As per the deal, JSPL's Australian subsidiary Jindal Steel and Power Australia Pty Ltd will acquire 25 million shares of Apollo at AUD 0.04 each. For this, a share subscription agreement was signed last week by both the firms.
Apollo has kept a target of exploring 500 million tonnes of magnetite bearing iron at Mount Oscar project, while it expects to make announcement on Commonwealth Hill reserves soon.
According to Apollo, JSPL's investment is part of an AUD 3.6 million fund raising programme of the company, for which it has received firm commitments.
Industry sources said that JSPL may increase its stake in Apollo to 20% in near future and can also go for buying entire iron ore from Australian firm's Commonwealth Hill mine, whose reserves' size is expected to be announced soon.
JSPL officials could not be reached for comments on the deal.
Stating that "Apollo is not up for sale", a spokesperson of the Australian firm said in an e-mailed statement that "the shareholder subscription agreement between JSPL and Apollo does not limit the stake that JSPL can own in Apollo Minerals."
The spokesperson further said that "at this stage, the investment by JSPL in Apollo represents a strategic investment and partnership only."
Shares of the JSPL closed today at Rs 484.70 apiece on the BSE, down 3.29% from the previous close.