Jsw Steel Limited · NSE:JSWSTEEL
Jsw Steel — Merger or Acquisition (January 2011)
16 slides from Jsw Steel's merger presentation, January 2011
Slide 1: Bigger the Better: JSW Steel + Ispat Analyst Meet
Bigger the Better + = JSW Ispat JSW Steel Analyst Meet
Slide 2: Inorganic Growth
Inorganic Growth Parameter JSW Ispat Capacity (mtpa) 11* 3.3 Operating since (year) 2000 2000 Plant Location South / West West Products Range Flat + Long Flat Raw Material Integration Partial Nil Technology Pioneer in COREX Pioneer in Twin Shell ConArc Technology / Thin Slab Casting Markets South /
Slide 3: Ispat Overview
Ispat Overview Dolvi - Integrated Steel Plant with own Jetty Nagpur- Downstream Unit Location: 75 km from Central Mumbai, Situated in Location: 850 km from Central Mumbai, Situated the commercial / manufacturing hub of western in the commercial hub of central India India Facilities Capacity (mtpa) S
Slide 4: Ispat Overview
Ispat Overview Product basket Hot rolled coils (HRC), Cold rolled coils (CRC), Galvanized, Galvalume, Colour coated sheets, pipes & tubes Pioneer in using latest technologies Twin Shell ConArc Furnace Thin Slab Casting Technology Compact Strip process (CSP) Others State-of-the-art faciliti
Slide 5: Ispat – past performance
Ispat –past performance All figures in Rs Crores Year ending Year ending Quarter Ending Particulars June 2010 Mar 2009 Sep 2010 (15 months) Production Qty (million MTs) 2.1 3.3 0.6 Sales Qty (million MTs) 1.9 2.9 0.6 Total income 8,538 10,579 2,185 EBITDA 1,431 1,723 (77) EBITDA margin 16.8% 16.3% -
Slide 6: Ispat – past performance
Ispat –past performance All figures in Rs Crores Year ending Year ending Quarter Ending Particulars June 2010 Mar 2009 Sep 2010 (15 months) Current Assets 2,954 3,693 3,512 Current liabilities 3,744 4,117 4,389 Long Term Debt 6,932 6,943 6,783 Total Debt Including Preference capital 8,403 8,185 8,04
Slide 7: Acquisition rationale
Acquisition rationale Inorganic Growth Opportunity Expansion Shore based without facility gestation No project Acquisition Leading player in the growing execution risks rationale western markets Flexible Attractive combination of valuation BF and DRI Cutting edge technologies 7
Slide 8: Turnaround Strategy
Turnaround Strategy Immediate Invest funds of Rs 2,157 Crores as Subscription / Advance subscription / Tranches to recommence operations/ reduce debt Refinancing of existing debt Short term Arrange linkages for Power at competitive price Arrange Coke - meeting 35% of requirement, replacing i
Slide 9: Turnaround Strategy cont…
Turnaround Strategy cont… Medium Term Capex (Rs Crores) Implementation of 110 MW Power Plant : 490 Implementation of 3 mtpa Pellet Plant : 600 Implementation of 1 mtpa Coke oven plant : 500 Cost saving Capex programmes : 132 Enhancement of capacity from 3.3 to 4 mtpa : 1,418 Total Capex
Slide 10: Terms of transaction
Terms of transaction Shareholding JSW to acquire controlling stake with investment in Equity of Rs 2,157 Crores and Open Offer, the existing promoters to hold 26% Dilution of holding for both the parties in case of capital raising in future Management control JSW to have management control I
Slide 11: Terms of transaction
Terms of transaction Implications for JSW ROFR for JSW on Ispat's Promoters’ stake and vice-versa Change in the name of the Target to JSW Ispat Steel Ltd Implications for Ispat Ispat’s promoters to maintain 26% shareholding at transaction completion 11
Slide 12: Ispat – Shareholding pattern
Ispat – Shareholding pattern Existing No of Equity shares in Crores Post transaction & Particulars Existing 38.7% CRPS conversion 49.1% Existing promoters’ holding 50.29 68.41 JSW Steel (fund infusion) - 108.66* 12.2% Lenders holding (a) 15.92 16.86 Others (b) 63.80 69.22 Post transaction & CRPS con
Slide 13: Impact on JSW financials
Impact on JSW financials All figures in Rs Crores as on 30th Sep 2010 Particulars JSW Steel JSW Steel Ispat JSW Steel consolidated (incl. proportionate Standalone Consolidated Standalone consolidation of Ispat) Net Sales (trailing 12 months) 20,114 20,963 8,959 24,692 EBITDA (trailing 12 months) 4,5
Slide 14: Indicative time line
Indicative time line Activity Date Reconstitution of Ispat's Board January 10, 2011 Ispat's general body meet January 18, 2011 Approval of lenders’ and allotment of shares to JSW February 3, 2011 Offer Opens February 11, 2011 Offer Closes March 2, 2011 14
Slide 15: Forward Looking and Cautionary Statement
Forward Looking and Cautionary Statement Certain statements in this report concerning our future growth prospects are forward looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward looking statements. The
Slide 16: Thank you
Thank you 16