JSW Steel to buy 45.5 per cent in Ispat Industries for Rs2,157 crore

Sajjan Jindal's JSW Steel is all set to acquire 45.5 per cent stake in Ispat Industries for Rs2,157 crore, sources close to the developments said.

JSW Steel would take management control of Ispat Industries following the deal, but the present promoter Vinod Mittal and family would continue to hold a stake of around 26 per cent in Ispat, with Kotak Mahindra Bank being the sole banker to the deal.

According to sources, the stake sale would be through issue of fresh equity by Ispat. JSW Steel would also make an open offer for Ispat shares.

The offer would be facilitated by Enam Secuities and JSW Steel would soon make an announcement to this effect.

With Rs6,500 crore debt on it's books, Ispat Industries is under corporate debt restructuring. Ispat's Dolvi, Maharashtra, steel facility has been shut since 7 November 2010.

The company has been in talks with lenders, including IDBI, IFCI, ICICI Bank and SBI, who want a strong management team be put in place to enable the company service the debt and resume normal operations for them to extend cash.

Ispat's Dolvi facility has a blast furnace and a hot-rolled coil plant with a capacity of 3 million tonnes, according to its website, The complex also has a 1.6 million tonne sponge iron plant.

The  Sajjan Jindal-led JSW Group has diversified interests in steel, energy, minerals and mining, aluminum, infrastructure and logistic, cement and information technology and. is one of the fastest growing business conglomerates with a strong presence in the core economic sector.