JSW Steel Announces INR 31,500 Crore JV with JFE Steel
Filing Summary
JSW Steel Ltd has entered into a strategic joint venture with JFE Steel Corporation, Japan, involving the slump sale of Bhushan Power and Steel Limited’s steel business. The transaction is valued at an equity of INR 31,500 crore. JFE will invest INR 15,750 crore for a 50% stake in the joint venture. The cash consideration for the slump sale is INR 24,483 crore. This move aims to monetize JSW’s holding in BPSL and strengthen its balance sheet. The joint venture will focus on producing value-added steels, leveraging JFE’s technological expertise.
JSW Steel Ltd has announced a strategic joint venture with JFE Steel Corporation, Japan. The transaction involves the slump sale of the steel business undertaking of Bhushan Power and Steel Limited (BPSL) to a 50:50 joint venture. The equity value of the transaction is set at INR 31,500 crore. The joint venture aims to leverage the technological expertise of JFE and the operational capabilities of JSW.
The financial terms of the transaction include a cash consideration of INR 24,483 crore for the slump sale. JFE Steel Corporation will invest a total of INR 15,750 crore in two tranches to acquire a 50% stake in the joint venture. This transaction allows JSW to monetize part of its holding in BPSL, which it acquired in 2021 through an IBC process.
The operational scope of the joint venture will focus on producing a variety of value-added steels. The collaboration aims to combine JSW’s project execution and operational excellence with JFE’s technological strengths. This partnership is expected to enhance the production capabilities of the joint venture, which will operate an integrated steel plant in India.
The timeline for the transaction includes the completion of JFE’s investment in two tranches. The joint venture will commence operations following the completion of these investments. Specific dates for the implementation phases have not been disclosed in the filing.
The entities involved in this transaction are JSW Steel Ltd and JFE Steel Corporation. JSW will continue to remain invested in the joint venture and participate in future value creation. JFE, a long-term strategic partner of JSW since 2009, will bring technological expertise to the joint venture.
This transaction is significant in the context of India’s growing steel market. JSW aims to achieve a steel-making capacity of 50 million tonnes per annum by FY 2031. The joint venture with JFE is a strategic move to secure growth in a financially prudent manner. The transaction aligns with JSW’s strategy to capitalize on India’s multi-decadal growth opportunity in the steel industry.
JFE Steel Corporation is one of the world’s leading integrated steel producers. Established through the consolidation of NKK Corporation and Kawasaki Steel Corporation in 2003, JFE operates several steelworks in Japan and affiliates worldwide. The company focuses on leveraging innovative technology to produce a wide range of steel products.
JSW Steel Ltd is the flagship business of the diversified JSW Group. It is India’s leading integrated steel company with a consolidated crude steel capacity of 35.7 million tonnes per annum. JSW is committed to sustainability and innovation, aiming to reduce CO2 emissions and transition to renewable energy by 2030. The company is recognized for its excellence in business and sustainability practices.