NEW DELHI: Jaiprakash Associates on Friday announced it has acquired Malvika Steel at Jagdishpur in Uttar Pradesh for Rs 207 crore. It will invest Rs 1,800 crore over the next three years to take the capacity of the plant to one million tonnes per annum.
The group plans to spend the sum in two phases — for manufacturing long products. In the first phase, the company will invest Rs 800 crore by December 2008 when the capacity is expected to touch be 5 lakh tonnes. It will invest another Rs 1,000 crore by March 2010 to take the total capacity of the steel plant to one million tonnes.
In order to meet the investment requirement for the steel plant and also to provide for capital expenditure for a 25 million tonne per annum cement capacity by 2009, the company has successfully raised $400 million on July 16, 2007.
“The company already has interests in power, engineering, construction and cement and a foray
into the steel segment was a natural diversification for us,” said Jaiprakash Associates’ executive chairman Manoj Gaur.
The Jaiprakash took over plant, land and assets of erstwhile Malvika Steel Ltd after sale by debt recovery tribunal through public auction where the Delhi-based construction and infrastructure company had given a bid of Rs 207 crore.
He said taking over of the steel plant was a strategic investment since setting up a greenfield unit and making it operational would have taken a minimum of five years. “With this steel plant, we have the basic infrastructure in place and the plant can be made operational in the next 24 months.”
