New Delhi: Jindal Steel and Power has picked up additional 2.67 percent stake in GNCCL - Gujarat NRE Coal's Australian subsidiary - for AUD 7.5 million (about Rs 43.44 crore), taking its holding to 12.74 percent. (Agencies)
In May, the Naveen Jindal-led firm had acquired 10.07 per cent stake in Gujarat NRE Coking Coal Ltd (GNCCL), for about AUD 25 million (about Rs 135 crore).
In a statement, GNCCL said that the funds from the share sale will be used for expanding the capacity of two coking coal mines to 6 million tonnes per annum (MTPA).
"The securing strong off-take partners is important as we continue the expansion of our two mines to our planned levels of over 6 MTPA and the placement funds will be utilised in our expansion project," the company's Executive Chairman Arun Kumar Jagatramka said in the statement.
Besides, Gujarat NRE will also sell 2 lakh tonnes of raw coal (run-of mine coal) annually to JSPL at a benchmark linked price.
"As part of the agreement, the company will issue and allot a further 30,000,000 fully paid ordinary shares to Jindal Steel & Power (Mauritius) Limited at AUD 0.25 per share raising AUD 7,500,000," it added.
Jindal Steel & Power (Mauritius) is the Mauritius-based subsidiary of JSPL. Going by the total issued shares at 1,12,31,37,858 of GNCCL, on Thursday's transaction amounts to 2.67 percent share sale to the Naveen Jindal-led firm.
According to Gujarat NRE, this share sale represents a premium of about 47 percent to the current market price of GNCCL, which is listed at the Australian Securities Exchange.
While acquiring stake in GNCCL in May, JSPL had also signed a long term contract to buy 5 million tonne of coking coal over a 10-year period from the Australian subsidiary of Gujarat NRE. The company also has the option to increase its purchase further by additional 5 lakh tonne in a year.
Of late, JSPL has been on acquisition mode. In last four months, the firm has made two strategic investments in Australian natural resource assets by acquiring 9.25 percent stake in Apollo Minerals and 10.07 percent stake in GNCCL.
Last month, it had entered into a deal to acquire Canada's CIC Energy, which has 2.6 billion tonne of high quality thermal coal mines in Botswana, for over Rs 600 crore.
Gujarat NRE's Australian subsidiary operates two coking coal mines in southern coal fields of New South Wales, Australia. Both the mines are estimated to have total coking coal reserves of 125 MT and resources of 651 MT.
Shares of Gujarat NRE closed unchanged at Rs 16.75 apiece on the on BSE, while JSPL scrip was up 0.88 percent at Rs 407.15.
New Delhi: Jindal Steel and Power has picked up additional 2.67 percent stake in GNCCL - Gujarat NRE Coal's Australian subsidiary - for AUD 7.5 million (about Rs 43.44 crore), taking its holding to 12.74 percent.