By Nisha Poddar, ET Now | 1 Dec, 2014
Sources suggest that Sajjan Jindal's JSW Steel is eyeing two big M&A deals, the company is in talks to buy Bhushan Steel's Odisha steel unit and is also looking at buying out promoters' stake in Bhushan invested company, Orissa Spong. Total enterprise value for the deal is being worked out at Rs 30,000 crores, a source said.
Bhushan Steel has a total debt of around Rs 35,000 crores on its books and has been asked by the lenders to sell its Odisha unit which is an integrated steel plant with a capacity of 5.6 million tonnes. Promoters of Bhushan Steel have been trying to find ways of bringing down the debt levels but may not be convinced about selling the Odisha unit.
Bhushan Group's energy arm has about 15% stake in Orissa Sponge in which Monnet Ispat holds 41% stake. Orissa Sponge had been in the middle of a takeover battle due to its iron ore and coal mine reserves, this is also the reason for JSW Steel's interest in buying the company. This deal will take the total steel making capacity of JSW Steel close to 20 million tonnes which is the largest by any domestic steel company in the Indian market.
Bhushan Steel's spokesperson denied any such development which JSW Steel's spokesperson said, "We do not comment of market speculation."
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