Japan's Sanyo Special Steel and Mitsui, majors in speciality steels and steel trading, respectively, have together invested Rs218 crore to buy 49 per cent stake in a new joint venture floated by Mahindra Ugine Steel Co (MUSCO).
The allotment of shares has been completed on Thursday against cash infusion by Sanyo of approximately Rs129 crore for their stake of 29 pet cent while Mitsui paid approximately Rs89 crore for their 20 per cent stake in Navyug Steel. MUSCO holds the balance 51 per cent of equity in the JV.
As part of the arrangement, Sanyo will offer technical support and Mitsui marketing assistance to the speciality steel joint venture, which will be called Mahindra Sanyo Special Steel Pvt Ltd (MSSSPL).
The Mahindra Group is also looking to extend its relationship with Mitsui and talks are currently on to see if it can be extended to auto components or aerospace, say reports.
The board of directors of MUSCO announced the financial closure of the 51:49 joint venture on Thursday.
This is likely to be the first step towards a larger alliance involving Mitsui and Mahindra Systech, the holding firm for the slew of 16 component businesses in Mahindra & Mahindra Group.