JSW Steel's US subsidiary raises $182 million for Texas plant upgradation

28 Oct 2022 , 09:29 AM

For the purpose of upgrading its plate mill in Baytown, Texas, JSW Steel’s US subsidiary obtained $182 million in long-term debt from Banco BPM and Intesa Sanpaolo of Italy.

Three Italian companies will provide the cutting line, rolling mill, grinding machine, and water treatment system for the plant upgrade, which will cost about $100 million.

In a statement released on Thursday, JSW Steel stated that of the total funding, $70 million is covered by the SACE guarantee offered by the Italian government in an effort to support Italian exports. A term loan makes up the remaining funds.

The benchmark Sensex closed the day Thursday up 0.36%, and the JSW Steel shares increased 5.44% to close at Rs679.45 on the BSE in response to the news.

The news of the investment comes as the World Steel Association forecasts that, in contrast to other major customers, US steel demand won’t decline this year.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA), which were reported by JSW Steel’s plate and pipe factory in the US for the most recent quarter, were $25 million, up 88% year over year but down sequentially. However, the company’s Ohio division recorded an EBITDA loss of $40 million despite a halving of sales.

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