JSW Steel, JFE Steel Ink JV Pact For Electrical Steel Products

JSW Steel Ltd. will set up a joint venture with Japan’s JFE Steel Corporation to manufacture and sell cold rolled grain-oriented (CRGO) electrical steel products.

The company today entered into an agreement with JFE for establishing a joint venture company in India for undertaking the business of CRGO electrical steel products, the Indian steelmaker said in a stock exchange announcement. The companies will hold 50% stake each in the joint venture.

The development comes after the companies in May this year agreed to establish a 50:50 joint venture company for CRGO electrical steel products after completing the joint feasibility study.

JSW Steel said the entire project cost, which is expected to be about 5,500 crore rupees ($668 million), will likely be financed by a mix of equity and debt.

The initial issued and paid-up share capital of the joint venture company at the time of incorporation will be two lakh rupees divided into 20,000 equity shares of 10 rupees each, JSW Steel said. This will be wholly owned by the company, it added.

Subsequently, JSW Steel and JFE each will infuse equity into the joint venture company in proportion to their proposed shareholding, subject to regulatory approvals, according to the statement.

(Note: $1 = 82.3093 Indian rupees)

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