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JSPL gets 5% in Rocklands via open offer

Shubhashish  |  Mumbai 

With this, the company has increased its shareholding in the Australian coal miner from 14.73 per cent to 19.39 per cent.

After extending the open offer deadline twice, Jindal Steel and Power Ltd (JSPL) has managed to grab 4.66 per cent share of the Australian coal miner Rocklands Richfields.

Much against the wishes of Jindal Steel, the takeover is far from over.

Jindal Steel said the company has increased its shareholding in Rocklands Richfield Ltd from 14.73 per cent to 19.39 per cent at the end of the twice extended open offer. Jindal now owns 69.8 million shares of Rocklands. The company, however, did not comment on the development.

The original open offer, at $0.25 per share of Rocklands, commenced on May 5 and was supposed to end on June 6. The share price of Rocklands, during this period was much above the offer price and Jindal Steel, on May 26, revised the offer price to $0.30 per share and extended the deadline to June 20. On June 9, this deadline was further extended to July 5.

Rocklands, which is in talks with Jindal Steel to set up a $10 million coal-brick project at Jindal Steel’s Raigarh plant, is vehemently opposing the takeover bid. The company has urged its shareholders not to tend their shares to Jindal’s open offer as the demand for coking coal in the world is rising and the company has a bright future because of the same.

In its announcement to the Australian Stock Exchanges on July 5, Jindal Steel said the company has increased its shareholding to 19.39 per cent from 14.73 per cent. The on-market purchases to this effect took place from June 16 to July 4.

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

Jindal, on the other hand, is very keen to acquire Rocklands and sees it as a strategic fit to its coal exploration activities in Australia. In an earlier statement, JSPL had said, “Jindal considers 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.”

However, this is not the first time Jindal Steel has tried to buy Rocklands. It made an attempt in 2009 and was locked-in a three way battle between Essar Steel of India and Meijin Steel of China. At that time, Jindal outbid Essar Steel and matched Meijin Steel’s offer of $0.56 per share of Rocklands. However, the talks between the two fell through and Jindal could not acquire Rocklands.

The coal deposits of Rocklands, according to Jindal Steel, are perfect fit for the company’s steel operations. Indian steel have been scouting for coal reserves across geographies, especially Australia as the quality of the deposits down under are of superior quality.

Rocklands has 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 currently losing money.

First Published: Wed, July 06 2011. 00:57 IST