JSW Steel rose 1.01% to Rs 1289.45 at 9:18 IST on BSE after the company entered into a definitive pact with Welspun Enterprises to acquire the entire stake held by Welspun Enterprises in Welspun Maxsteel for an enterprise value of Rs 1000 crore.
The announcement was made after market hours on Monday, 18 August 2014.
Meanwhile, the S&P BSE Sensex was up 130.90 points or 0.5% at 26,521.86.
On BSE, so far 5,886 shares were traded in the counter as against average daily volume of 74,000 shares in the past two weeks.
The stock hit a high of Rs 1295 and a low of Rs 1285.25 so far during the day.
JSW Steel said that it has entered into an definitive agreement with Welspun Enterprises (WEL) to acquire the entire equity shares held by WEL in Welspun Maxsteel (WMSL) for an enterprise value of Rs 1000 crore plus net current assets as of an agreed date of 31 August 2014, subject to the relevant regulatory approvals and customary closing conditions.
Welspun Maxsteel (WMSL) is situated in close proximity to JSW Steel's Dolvi unit, offering complimentary infrastructure and location to augment the current envisaged expansions at Dolvi, JSW Steel said. In line with this objective, JSW wishes to acquire the equity shares of WMSL, the company added.
WMSL has an installed capacity of 0.9 MTPA gas based DRI plant, with a captive jetty and a captive railway siding. DRI plant is located in Raigad district of Maharashtra.
JSW Steel said it has surplus pellets in its subsidiary Amba River Coke which will be supplied to WMSL. The cost of production in WMSL is expected to come down due to replacement of significant portion of its bought-out pellets with captive pellets, JSW Steel said. The DRI produced by WMSL shall initially be used partly by JSW Steel's Dolvi unit, and would be consumed in the entirely post completion of its ongoing expansion to 5 MTPA, JSW Steel said in a statement.
JSW Steel reported a consolidated net profit of Rs 656.49 crore in Q1 June 2014 as against net loss of Rs 381.82 crore in Q1 June 2013. Total income from operations rose 29.04% to Rs 13254.07 crore in Q1 June 2014 over Q1 June 2013.
JSW Steel, the flagship company of the JSW Group, is one of the lowest cost steel producers in the world. The group has diversified interest in mining, carbon steel, power, industrial gases, ports, and cement.
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