According to an agreement with the Australian firm Apollo Minerals, Jindal Steel and Power (JSPL) would invest A$10 million in NewCo, which is a new company to be formed from the demerger of Apollo’s business.
Apollo Minerals is a diverse iron ore, base and precious metals exploration company. As part of the demerger, all iron ore assets will be transferred to NewCo, while Apollo will retain its base and precious metals portfolio.
JSPL and Apollo have signed a non-binding termsheet for the deal and “formal documentation and binding agreements are expected to be signed over the next two months.
The demerger will consist of an in-specie distribution of NewCo shares to Apollo shareholders, an initial public offer (IPO) by NewCo, through which JSPL will invest A$10 million and listing of NewCo shares on the ASX,” it added.
The existing shareholders of Apollo Minerals would get about 49 percent stake, as part of the demerger, in NewCo on a pro-rata basis after JSPL investment. JSPL, with 11.7 percent stake, is already a significant shareholder.
This is a transformational event for Apollo and one that will allow the firm to unlock maximum value for its shareholders. The separation of its iron ore and base-precious metals assets is an important part of this process.
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