JSW Steel has taken over Dolvi Minerals and Metals by buying the remaining 60% of its share capital for Rs 109 crore, the company informed the stock exchange on Wednesday.
With 40% already owned by JSW Steel earlier, Dolvi Minerals and Metals (DMM), that deals in the business of acting as trader, whole-seller and retailer in metallic and non-metallic minerals has now become JSW Steel’s 100% subsidiary.
“Pursuant to the acquisition of shares of DMMPL, DMMPL has become a wholly owned subsidiary of JSWSL, wherein JSWSL and its nominees hold 100% of the issued and paid-up equity share capital of DMMPL,” said the notification by JSW Steel.
The acquisition will help the 18 MT steelmaker with raw material security as DMM’s subisidiary Dolvi Coke Projects will be supplying coking coal to JSW Steel’s Dolvi facility. Coking coal and iron ore make for the two most important raw materials for steelmaking with JSW Steel mostly importing most of its coke requirements.
The Sajjan Jindal-led steelmaker has lined up an elaborate organic expansion plan where it plans to add capacities to its existing works at Vijayanagar in Karnataka and Dolvi in Maharashtra. It is spending close to Rs 44,000 crore till March 2020 to scale up its capacity at Dolvi from 5 million tonne to 10 million tonnes and its capacity at Vijayanagar from the current 12 MT to 18 MT; a vision that will require the company to have more coke security and with the rupee falling to record lows, having local supply of the mineral is likely to help the company save costs.
Apart from its organic expansion plan, the company has also acquired the 1.5 MT Monnet Ispat and Energy NSE -3.23 % under the insolvency law and has put binding bid for Bhushan Power and Steel which is still awaiting a final court order.
Source: Economic Times