Japan's JFE eyes billion-dollar stake in India's JSW

TOKYO — Japan's JFE Holdings said Tuesday its steel unit plans to buy a near 15 percent stake in India's JSW Steel for around one billion dollars as it looks to boost its presence in the fast-growing market.The country's second-largest steelmaker by output after Nippon Steel will also provide technology support and expertise in automobile steel production, with carmakers increasingly looking to assemble vehicles in India for the local market.The 90 billion yen (one billion dollar) investment plan follows a strategic tie-up between the groups announced in November.JSW will issue new shares reserved for JFE to enable it to hold 14.99 percent of its capital, a ratio that JFE will acquire even if share prices move higher and the necessary investment exceeds 90 billion yen."With this capital link, the two companies will expand their relations and consider joint projects," a JFE statement said.The auto industry in India is expected to grow steadily over the next decade, with annual sales forecast to reach 3 million units by 2016, as middle-class purchasing power grows.JFE on Tuesday announced a fiscal first quarter net profit of 27.9 billion yen (322 million dollars) compared to a 41.6 billion yen loss in the same period a year earlier, thanks to cost reductions and improving demand.However, shares in JFE Holdings ended 3.13 percent lower in Tokyo trade Tuesday after the company forecast a 120 billion yen net profit for the fiscal year through March against analyst forecasts of a 160 billion yen profit. Copyright © 2010 AFP. All rights reserved. More »

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