JSPL to invest about Rs 56 cr to acquire majority stake in iron ore assets  

Jindal Steel and Power will acquire majority stake in iron
ore assets of Australian firm Apollo Minerals by investing $10 million (about
Rs 56 crore).

According
to the deal, Apollo Minerals will split its iron ore assets into a new listed
company, NewCo, on the Australian Securities Exchange.

JSPL
will acquire majority stake in NewCo by investing A$10 million at the time of
its listing through an IPO.

In a
statement, Apollo Minerals said that its existing shareholders would get about
49 per cent stake, as part of the demerger, in NewCo on a pro-rata basis after
JSPL investment.

JSPL,
with 11.7 per cent stake, is already a significant shareholder in Apollo
Minerals — a diverse iron ore, base and precious metals exploration company.

As part
of the demerger, all iron ore assets will be transferred to NewCo, while Apollo
will retain its base and precious metals portfolio, the statement said.

“The
demerger will consist of an in-specie distribution of NewCo shares to Apollo
shareholders, an initial public offer by NewCo, through which JSPL will invest
A$10 million and listing of NewCo shares on the ASX,” it added.

Both
the firms have signed a non-binding termsheet for the deal and “formal
documentation and binding agreements are expected to be signed over the next
two months“.

Apollo’s
Non-executive Chairman Tony Ho said: “This is a transformational event for
Apollo and one that will allow us to unlock maximum value for our shareholders.
The separation of our iron ore and base—precious metals assets is an important
part of this process.”

Talking
about partnership with JSPL, he said that “we now have the key ingredients
required to take Apollo’s iron ore projects from exploration to production in
the shortest possible time“.

Following
the deal announcement, shares of Apollo Minerals shot up 20 per cent to close
at A$0.072 on the ASX.

JSPL
scrip was trading at Rs 342.30 in the late afternoon trade on the BSE, down 3.43
per cent from the previous close.

Apollo
is a Sydney-based firm, having three major iron ore assets—Commonwealth Hill
project in South Australia, Mount Oscar Project in the Pilbara region of
Western Australia and 70 per cent stake in Gabon’s North Kango iron project. It
also has a Titan Base—Precious Metals Project in South Australia.

Sourced