JSW raises Rs 1,849 cr via warrants issue to promoters

JSW Steel, the country's largest private steelmaker by domestic capacity, today said it has raised as much as Rs 1,849 crore by issuing warrants to a promoter group firm, mainly to cut its widening debt.

"...The Share Allotment Committee of Directors of the company, at its meeting held on June 16, 2010, has allotted 1,75,00,000 warrants to Sapphire Technologies, a promoter group company, on a preferential basis," JSW Steel said in a filing to the Bombay Stock Exchange.

Based on today's price of Rs 1,056.80 for JSW Steel shares, which was 0.57 per cent lower compared to yesterday's close on the BSE, the company has raised about Rs 1,849 crore.

"Each warrant entitles the holder to apply for and be allotted one equity share of the company of par value of Rs 10 each at a price of Rs 1,210 per share at any time within 18 months from the date of allotment of the warrants," it said.

JSW Steel Joint Managing Director and Group Chief Financial Officer M V S Seshagiri Rao had earlier this month said the firm would raise Rs 2,100 crore, which will help in cutting debt.

The approval for issuing warrants to promoters was given by shareholders to the company at its extraordinary general meeting held on June 2, 2010.

As and when the promoters convert these warrants into shares, their stake in the company would rise to 49.70 per cent as against their existing equity holding of 44.99 per cent. The move comes at a time when Japanese steel maker JFE is looking to buy a 10-14 per cent stake in the domestic firm.

JSW Steel's debt stood at about Rs 16,000 crore at the end of the last fiscal and its debt equity ratio was 1.69:1. The steel-maker has outlined a mega-expansion programme at its Vijaynagar facility in Karnataka. It also has plans to set up two steel plants, in Jharkhand and West Bengal, at a cost of Rs 35,000 crore each.