Jindal Steel & Power to buy Canadian coal company for $114 mn

Jindal Steel & Power Limited (JSPL) is set to buy Canadian coal mine developer CIC Energy Corp for $114 million in cash, more than a year after CIC ended an agreement with JSW Energy.

Sajjan Jindal-led JSW had in November 2010 offered to buy CIC for C$422 million, but the deal was terminated about eight months later, forcing CIC to look for other buyers.

JSPL is led by Sajjan's brother, Naveen Jindal.

CIC, which has lost a third of its value in the last 12 months, said Jindal Steel has made an offer of C$2 per share. The offer is at a premium of 27 per cent over the stock's Monday closing price of C$1.57 on the Toronto Stock Exchange.



CIC's Mmamabula coal field in Botswana has an estimated mineral resource of about 2.4 billion tonnes, giving Jindal Steel much-needed fuel to power its plants in India.

CIC is being advised by Deutsche Bank Securities Inc and said the companies have set a termination fee of about C$3.5 million if the deal is not closed under certain circumstances.

Shares of JSPL closed 4.16 per cent lower on the Bombay Stock Exchange on Wednesday.

With inputs from agencies