JSW Steel stares at warrant conversion, bond maturity

Mumbai : Reeling from losses due to the acquisition of Ispat Industries, JSW Steel is now staring at two big events. The first is a December 15 deadline for the promoters to infuse Rs 1,588 crore into the company and, second, maturing of foreign currency convertible bonds (FCCBs) six months down the line.

These couldn’t have come at a worse time. The company issued preferential warrants to Sapphire Technologies, a promoter group company, in June 2010 to raise capital to meet its capex plans and service debt. It had issued 17.5 million shares at Rs 1,210 apiece to raise Rs 2,117 crore. The issue price was at a 15 per cent premium to the then share price of JSW Steel. But the tide has turned since then, and JSW’s stock price is languishing at over 50 per cent discount to the warrant issue price.