India’s top steelmaker, JSW Steel has entered into a 5-year Advance Payment and Supply Agreement (APSA) with Duferco International Trading Holding (DITH) for a consideration of 700 million dollars in a move that will help the steel company in funding its growth plans, the company announced on Friday.
JSW Steel will be required to provide “committed exports of steel products” to the Swiss steel trader DITH for the said period that will assure the latter of a “captive supply of various steel products from JSW”.
This arrangement between the two parties makes it the largest trade finance deal to have been arranged in the Indian steel sector and is inked at a time when JSW Steel has emerged as the winning bidder for the stressed steel company Bhushan Power and Steel for which it has reportedly offered Rs 19,650 crore.
“The structured long-term trade finance transaction is an important deal in diversifying the sources of financing for JSW Steel. This not only enables JSW to raise funds at competitive rates but also assures incremental volume of sales in export markets leveraging the wide spread global network of the DITH Group Companies,” Seshagiri Rao, JMD and Group CFO said.
Leave a Reply