Jindal Steel makes second attempt at acquiring Rocklands of Australia

After one prior failed attempt to acquire Australian coal miner Rocklands Richfield, Jindal Steel and Power is at it again with a second try. The company has launched an open offer to acquire all shares of the company at $0.25 per share valuing it at $88 million.

Jindal Steel and Power (Australia) Pty Ltd, a wholly owned subsidiary of Jindal Steel and Power Ltd has initiated the open offer which will commence on May 5 and will end on June 6. The company is offering $0.25 per share which is at a premium of 43 per cent to the closing price of Rocklands as on April 18.

Jindal Steel and Power, through its Mauritian subsidiary, Jindal Steel and Power (Mauritius) Ltd holds 14.46 per cent stake in Rocklands Richfields.

Jindal has appointed Wilson HTM to act as its on-market broker for the share purchase. Deloitte Corporate Finance is the financial advisor to Jindal and Hopgood Ganim is the legal counsel to the company.

Wilson HTM, in a statement to the Australian Stock Exchange, said, “Jindal considers that Rocklands represents an important addition to Jindal’s coal exploration activities in Australia. Jindal considers that it is well placed to ultimately bring the asset to development and production, creating future jobs and opportunities for the people of Queensland and a potential important feedstock for Jindal’s international steel manufacturing activities.”

This is not the first time that Jindal Steel has tried to buy the company. In 2009, Jindal was locked in a three way battle with Essar Steel of India and Meijin Steel of China to acquire Rocklands. The company, back then, had offered to buy Rocklands at $0.42 per share but later had to match Essar Steel which offered $0.50 a share, valuing the miner at $150 million. Essar later backed out and Meijin Energy Of China entered with a $0.56 per share offer. Jindal matched the offer in January 2010.

However, in February 2010, the talks between Jindal Steel and Rocklands, too, fell. The two companies, in April 2010, announced a 50:50 joint venture to set up a coal-brick project at Jindal Steel’s Raigarh plant. The estimated cost of the project is $10 million and is expected to have a capacity of 600,000 tonnes per year.

The Sydney-based Rocklands’ basic activity is exploration of coal. It controls a series of high-grade coking coal deposits in the Bowen Basin of Queensland. The company also has a 480,000 tonnes per annum coking coal plant located in eastern China which is running into operating losses.