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UPDATE 1-India's JSW Steel bids for Tata UK assets - sources

Tue 10th May, 2016 1:34pm
* Bids for assets including Port Talbot plant in Wales 
    * JSW Group one of India's most indebted conglomerates 
    * JSW Steel shares down 3 pct to lowest in a month 
 
 (Adds JSW comment) 
    By Promit Mukherjee and Krishna N. Das 
    MUMBAI/NEW DELHI, May 10 (Reuters) - India's JSW Steel Ltd 
 JSTL.NS  has bid for the British operations of Tata Steel Ltd 
 TISC.NS , two sources with direct knowledge of the matter 
confirmed on Tuesday, prompting concerns about its debt levels 
and putting pressure on its shares. 
    JSW Steel said in a statement it was evaluating UK steel 
assets but did not name any specific target. 
    "As part of the company's growth strategy, the company 
evaluates several opportunities including the current 
opportunity of UK steel facilities," JSW said.  
    "It is premature to add anything further at this stage." 
    JSW Steel, controlled by acquisitive billionaire Sajjan 
Jindal, wants to become the world's third-largest steel company 
and the bid for the Tata assets is in line with that goal, said 
a source close to the company. 
    The Financial Times first reported JSW's bid. 
    India's Tata said on Monday that seven expressions of 
interest for its British assets had advanced to the next stage 
of a sale process it began last month. 
    Tata did not name the bidders, but metals group Liberty 
House and a buyout team called Excalibur confirmed submitting 
expressions of interest.  urn:newsml:reuters.com:*:nU8N18000O  urn:newsml:reuters.com:*:nL5N1801P6  L5N183134  
    Tata announced plans in March to sell its entire UK steel 
operation, which had been hit by cheap Chinese imports, soaring 
costs and weak demand. 
    Keen to avoid the loss of 10,000 jobs, Britain's  
Conservative government has offered hundreds of millions of 
pounds in support to potential buyers and said it could take a 
25 percent stake in the firm. 
    Mumbai-based JSW Steel unsuccessfully bid in 2014 to buy 
some assets from Italy's second-largest steelmaker, Lucchini, to 
enter the European market. In 2010, it bought out Indian company 
Ispat Steel  JSWI.NS , more than a decade after JSW emerged from 
near-bankruptcy. 
    JSW Group, with interests in steel, power, cement and ports, 
had a gross debt of around 400 billion rupees ($6 billion) as of 
April, making it one of India's most indebted conglomerates. 
    JSW Steel Joint Managing Director, Seshagiri Rao, told 
Reuters last month that although the group was hungry for 
growth, it would not let its financial stability suffer. 
    Infrastructure bankers in Mumbai say, however, that they are 
uncomfortable with the JSW Group's debt, and they think the 
company is only testing the waters with the Tata bid. 
    One potential deal-breaker is the big pension liabilities of 
the Port Talbot steel mill in Wales that JSW Steel might have to 
shoulder, said the bankers who did not want to be named. 
    The bankers also said that a bargain deal might help JSW 
Steel turn around Tata's money-losing UK business given their 
record of making steel efficiently and profitably in India. 
    JSW Steel's shares, which have risen a quarter so far this 
year, fell more than 3 percent on Tuesday to their lowest in a 
month. 
 ($1 = 66.6700 Indian rupees) 
 
 (Reporting by Promit Mukherjee and Krishna N. Das; Editing by 
Tom Hogue and Keith Weir) 
 ((Krishna.Das@thomsonreuters.com; +91)(11)(4954 8026/3015 8026, 
+91-98711-18314; Reuters Messaging: 
Krishna.Das.thomsonreuters.com@reuters.net, Twitter: https://twitter.com/krishnadas56)) 
 
Keywords: TATA STEEL/JSW STEEL
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