Jindal Steel acquires CIC Energy for Rs600 cr

Naveen Jindal-controlled Jindal Steel and Power (JSPL) has acquired UK-based and Toronto Stock Exchange-listed power firm CIC Energy for $115 million, or Rs600 crore.

Jindal BVI Limited, a subsidiary of JSPL, will acquire 100% shares of CIC in due course and de-list it from the stock exchange.

The price of $115 million works out to $2 per share, much below $7.42 that sister company JSW Energy offered in June 2011. That bid was later withdrawn as the British company was immersed in litigation.

JSPL did not indicate if CIC is out of litigation now.

CIC Energy, which is focused on the southern African nation Botswana, boasts of 6 billion tonne coal reserves.

JSPL said it will invest up to $700 million in developing the coal mine and setting up a power plant in the next 2-3 years.

“We are planning to set up a 300 megawatt (mw) power plant in the region and will synchronise the production of the coal from the mine with the commissioning of the power plant,” said Sushil Maroo, director – finance, JSPL and head of the company’s power arm.

He said JSPL’s power arm is setting up 25,000 mw of capacity in India by 2020 and is on the lookout for coal assets globally. “We have coal assets in South Africa, Mozambique, Australia and Indonesia, most of which will start production in the next two years. Add to this our Botswana asset and we will be highly backward integrated in the next 3-5 years,” he said. But JSPL won’t move coal from Botswana to India immediately as that is part of a long-term plan.