By Paritosh Parasher, IANS,
Melbourne : JSW Steel, one of India’s major steel producers, is considering a $5 billion bid for Australia’s coal mining company New Hope Corp, Sydney Morning Herald newspaper reported Tuesday.
The bid for Ipswich, Queensland-based coal producer is reported to be in the initial stages as the Indian company is “studying the assets and may make an offer”. The Australian newspaper has quoted two persons involved with the bid offer who have asked for confidentiality at this early stage.
If JSW Steel manages to acquire New Hope assets, the third largest Indian steel producer would not only have thermal-coal producing mines but also an export terminal.
“The New Hope asset is very big and will help the energy unit of JSW to secure raw material,” SMH has quoted Abhisar Jain, an analyst at Centrum Broking Pvt. in Mumbai. “It will be a huge task for someone like JSW to raise money for such an asset,” he added.
JSW Steel is the flagship company of JSW Group. The Indian conglomerate owned by Jindal family also includes JSW Energy. The Australian takeover proposal is reported to cover the JSW Group against the fluctuating steel prices. The Group reportedly had to suffer as the raw material prices doubled last year because of floods in Australia’s coal producing regions in the Queensland state.
The Indian steel producer reportedly imports almost all of the required coal to run various energy plants currently producing 2,330 megawatts. The JSW Group has more power plants coming up and proposes to increase the combined installed capacity to 11390 MW by 2015, the paper said.
Sydney Morning Herald has also quoted JSW Steel spokesman Manish Kalghatgi in saying that there was no proposal to take over the Australian coal producer at this stage.
There were minor changes in the share price of the Australian Stock Exchange (ASX)-listed New Hope Corporation Ltd (ASX code: NHC).
(Paritosh Parasher can be contacted at [email protected])