JSW Steel all set to merge Ispat with itself

JSW Steel all set to merge Ispat with itselfPrivate sector steel producer JSW Steel is reportedly all set to merge JSW Ispat with itself as a part of its much anticipated comprehensive restructuring.

Emerging reports suggest that the JSW Steel-JSW Ispat merger will likely be in the ratio of 1:75. In other words, there will be 75 shares of JSW Ispat for every share of JSW Steel.

The merged entity would be India's biggest private sector steel firm with production capacity of 14.3 million tonnes per annum, which would enable it to almost match public sector SAIL India's capacity of 14.6 million tonnes per annum.

But, many are not positive about the reported merger of the two steel producers.

An analyst with an international brokerage said on the condition of anonymity, "The (Steel-Ispat) merger was expected for a long time but I don't see anything positive (in it), apart from tax benefits and a possible fund infusion by JFE."

The total combined debt of the steel giant is expected to jump from current Rs 17,000 crore to Rs 25,000 crore.

Japanese steel producer JFE, which holds 15 per cent stake in JSW Steel, may purchase more shares of the merged entity to maintain its shareholding at the same level.