jindal serious about bid for rci

Taken from Wall Street Journal

JANUARY 8, 2010, 4:04 A.M. ET

Jindal Still Interested in Rocklands Bid

By SAHIL MAHTANI And PRASENJIT BHATTACHARYA

NEW DELHIIndia's Jindal Steel and Power Ltd. is still interested in acquiring Rocklands Richfield Ltd. in a $180.8 million deal, despite having reduced its stake in the Australian coal company over the past few weeks, a senior company executive said Friday.

"We are serious about the bid for Rocklands Richfield," Director Sushil Maroo said, adding that the share sales in the recent weeks were intended to keep Jindal Steel and Power's stake below 15% because of Australian regulations.

In Australia, Rocklands Richfield's shares rose 11% to 42 Australian cents, or about 38 U.S. cents.

Jindal brought down its stake in Rocklands Richfield to 13.6% from 16.4% during November and early December. Foreign companies need to apply to the Foreign Investment Review Board to raise their stakes above 15% in Australian companies.

While Mr. Maroo didn't elaborate any further about the recent share sales, another company executive said that Jindal had no obligation to inform Rocklands Richfield of any equity transaction in the company that the Indian steel company conducts in the market.

Last week, Jindal Steel and Power matched an offer of 56 Australian cents a share, which was made by China's Meijin Energy Group, for the Australian coking coal company. The 56 cents a share offer values Rocklands Richfield at 197 million Australian dollars.

The executive also said that Jindal is in the process of conducting due diligence on Rocklands Richfield.

"Initially [in September], we had bid for the company at 42 cents a share, and the current bid we submitted a few days back was at 56 cents a share. So there's more due diligence that needs to be done as this bid values the company higher," the executive added.

Coking coal is a critical asset for Indian steel companies as it is not mined locally. Rocklands Richfield estimates that it has about 900 million tons of coal reserves in Queensland state. It also operates a coking-coal plant in eastern China.