JSW Steel Ltd.'s joint venture with Japan's JFE Steel Corp. will have the capability for 10 million tonnes of steel production in the next few years, Jayant Acharya, joint managing director and CEO, said on Wednesday.
As part of the deal, Bhushan Power and Steel Ltd.'s integrated steel facility in Odisha will be transferred to a 50:50 joint venture between the two companies. Billionaire Sajjan Jindal-led JSW Group acquired BPSL in 2021 through an insolvency process.
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"We turned a sick unit into a profitable one. The asset is very different from what we took over. This JV enables JSW Steel to accelerate its growth beyond 51 million tonnes," Acharya said in a press conference in Mumbai.
BPSL operates 4.5 MTPA integrated steel facility in Odisha.
JFE will invest a Rs 15,750 crore in two tranches for a 50% stake in the joint venture. The equity valuation of BPSL is Rs 31,500 crore and joint control will be established by March 2026.
The CEO said Rs 37,258 crore of total deleverage will happen on JSW Steel's balance sheet, which will allow India's top steelmaker to pursue growth.
The company's consolidated net debt as of September stood at Rs 79,153 crore, according to an investor presentation. The debt-to-equity ratio was 0.93.
Kaustubh Kulkarni, head of mergers and acquisitions at JSW Group, said JFE will not get extra board seat through the BPSL deal. "Both partners will have equal representations in the BPSL board. The management will be taken up by the partners in rotation," he said.
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