Jindal Steel and Power (JSPL) said it would acquire Oman?s Shadeed Iron & Steel Co for $464 million (Rs 2,134 crore) with an aim to tap the demand for steel in West Asian and North African countries. These countries face a supply squeeze of over 15 million tonne.

The development comes within days of JSPL saying it had aborted talks with Al Ghaith Holdings of the UAE, which owns Shadeed, on account of many ?open issues.? However, a company spokesperson told FE: ?The issues that were there earlier have been resolved, and hence, the company has decided to proceed with the transaction.?

JSPL, through its 100% subsidiary Jindal Steel & Power (Mauritius) Ltd, Mauritius (JSPLM), has acquired Shadeed, incorporated under the laws of the Sultanate of Oman.

The company was also able to resolve several outstanding issues in relation to the title and contracts with the Oman government, which gave the company comfort to proceed with the transaction.

A Mumbai-based analyst said that the deal was positive for the company.

?However, the company has to ensure that the plant, which is not functional now, should be up and running within six months. Moreover, this deal will help JSPL enter the gas-based DRI (directly-reduced iron or sponge iron) segment. The company has been into coal-based DRI so far. The port-based location is also beneficial for the company. If you look at the valuation, it comes to $310 per tonne, which seems to be a rather discounted deal,? he added.

The New Delhi-based JSPL said it has tied up $400 million in debt financing from international banks and the balance will come from internal accruals.

On Tuesday, JSPL shares were up 1.23% on the BSE, closing at Rs 623.80.

?This is a tremendous acquisition for JSPL as the facility is engineered by Kobe Steel ( Japan ) and Midrex (USA), leaders in the field of direct iron technology, and JSPL believes facility can be made operational within a year. This is also the same technology JSPL will be using in its Orissa facility, and the additional experience will help bring this new facility on stream in a timely manner,? JSPL said in a statement.

Shadeed is installing 1.5 mtpa (million tonnes per annum) gas-based hot briquetted iron (HBI) plant at Sohar Industrial Port area of Sohar , Oman , which will help meet this demand.