JSW Steel seeks to raise up to $2b via foreign currency bonds

Steel pipes. Reuters.

JSW Steel Ltd on Tuesday said it will seek shareholders’ approval to raise as much as $2 billion by selling non-convertible foreign currency denominated bonds to fund its long-term capital expenditure plans.

In addition, the company will also seek approval from shareholders to raise up to Rs.4,000 crore by selling shares and debentures to institutional investors through the qualified institutional placement (QIP) route.

JSW Steel will seek shareholders’ approval at its annual general meeting (AGM)on 26 July.

The company said it plans to have 40 million tonnes per annum (MTPA) of steel-making capacity by 2025. “The Indian economy is poised for robust growth, backed by strong macroeconomic factors and government’s pro-growth policies. The company has just completed its present brownfield expansion to reach 18 MTPA capacity. It has a strategic vision to reach 40 MTPA capacity by 2025 with significant investment in mineral resources (iron ore and coal),” the company said in its AGM notice sent to BSE.

The company also plans to use part of these funds raised to refinance its expensive debt.

“The proceeds of the issue will be used for long-term funding to meet the planned capital expenditure and for other corporate purposes, including refinancing of expensive debt to reduce interest costs and to meet any unlikely shortfall in unforeseen circumstances,” JSW Steel said in the notice. It added that it will also continue to monitor forward and backward integration opportunities for its steel-making operations in India.

The company at a press conference in May said it plans to participate in the upcoming iron ore mine auctions in Karnataka. JSW Steel was also one the seven bidders who were shortlisted for Tata Steel’s UK assets.

“If the funds raised help replace existing debt by reducing interest cost and increasing maturity profile it’s a good move. The portion taken for capital expenditure will increase the debt burden and hence it would be important to know the project details,” said Jayanta Roy, senior vice-president at ratings agency Icra Ltd.

JSW Steel will also seek shareholder approval to increase its borrowing limit from the current Rs.50,000 crore to Rs.60,000 crore.

As of March 2016, JSW Steel had a total debt of Rs.35,171.26 crore.

On Tuesday, shares of JSW Steel rose 2.84% to Rs.1427.30 apiece on BSE.

Also read:

India: Is JSW Group turning to be a compulsive bidder of steel assets?

JSW Steel among seven bidders shortlisted for Tata Steel’s UK assets

This story was first published on livemint.com

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.