The Naveen Jindal-led Jindal Steel and Power (JSPL) will acquire the Oman-based Shadeed Iron and Steel Co for $ 464 million, which will enable the company to cater to the Middle East and North African countries.
The agreement for this acquisition was signed with UAE’s Al Ghaith Holdings, the promoters of Shadeed Iron and Steel. The other company that was in the run for Shadeed was a UAE company Emirates Steel Industries.
Shadeed is implementing a 1.5 million tonnes per annum steel plant, which is expected to start production within a year. It is a gas-based unit.
JSPL has been on an acquisition spree and has acquired coal and iron ore mines in Africa and Bolivia.
The company said that there is a short supply of 15 million tonnes of steel in the Middle East and North Africa and the acquisition will help it to expand in these markets. The plant has the same technology, which JSPL will be using in its Orissa facility.
The company said that it had earlier resolved several of the outstanding issues in relation to the title and contracts with the Oman government and this gave it comfort to proceed with the acquisition.
Last week the JSPL had said that it had aborted the deal as there was a title ownership issue due to existing transactions with a British Virgin Islands company. The company had also said the land title of the unit was ambiguous.