JSW Steel backs out of talks to buy Brahmani -Report
ET reported that JSW Steel is backing out of negotiations to buy out Brahmani Steel, promoted by the controversial Reddy brothers of Karnataka, due to concerns over valid mining permits and a hostile state government.
As per report, JSW was in talks to pick up a majority stake in the 4 million tonne Brahmani Steel, founded jointly by Mr G Janardhan Reddy and Mr G Karunakara Reddy.
The report cited people familiar with the development as saying that talks between the JSW and the Reddys had been going slow due to lack of clarity over mining permits. The two parties could also not agree on the percentage of stake to be sold to the JSW. JSW wanted a greater share in the supply of iron ore which the Reddy brothers were reluctant to cede.
However people familiar with the company said JSW was not comfortable with buying just 51% stake in Brahmani Steel and was keen on having complete equity control. The Reddy brothers, on the other hand, were in favor of retaining a significant minority stake.
Brahmani Steel owned by the Reddys’ Obulapuram Mining Company has already got 10,000 acres in Cuddapah district of Andhra Pradesh and civil works have now started to initially build a 2 million tonne plant.
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