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Bloomberg: JSW Seeks to Sell U.S. Plant as Demand Revives

08/22/2013 - JSW Steel Ltd., India’s third-biggest steelmaker, will consider selling its U.S. mill complex to help reduce debt and boost earnings as a revival in the world’s biggest economy spurs demand, Bloomberg reports.

The company will start looking for buyers once the plant has turned around, joint managing director Seshagiri Rao said in a phone interview. JSW Steel, 15% owned by Japanese steelmaker JFE Holdings Inc., had 216.9 billion rupees (US$3.4 billion) of debt as of 31 March 2013, according to data compiled by Bloomberg.
A sale will help chairman Sajjan Jindal lower liabilities and boost earnings margins, which have narrowed for 12 straight quarters as interest costs surged. The boom in shale gas production and a consequent revival in economic growth has improved the prospects for the Texas-based maker of plates and pipes, which JSW acquired in 2007, according to Rao…
…JSW Steel paid $900 million for a 90% stake in the unit in 2007 to tap demand from the oil and gas industry. The global recession caused prices for steel hot rolled coils, a benchmark product, to slump 40% from a peak of US$1,095 a metric ton in July 2008.
At the time it bought the unit, JSW Steel planned to ship steel slabs from its India plant to make plates and pipes in the U.S. The slump in demand forced a change in strategy that left JSW Steel USA utilizing less than half its capacity, Rao said…