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Sajjan Jindal buys Eton's stake in JSW Infra for Rs 600 crore

The Economic Times:  November, 2014

Mumbai: Sajjan Jindal, the billionaire owner of diversified JSW Group with interests in steel, cement and power, has bought a 10% stake owned by global hedge fund Eton Park Capital in his privately-owned ports company JSW Infrastructure for roughly Rs 600 crore, two people with direct knowledge of the development said.

The stake sale signals the bright prospect of the Indian ports sector as cargo traffic rises with increase in demand for steel, coal and petroleum products. A JSW spokesperson declined to comment.

Eton Park, which manages $13 billion globally, invested $125 million (Rs 562 crore) in 2010 to help the company expand its ports business and trim debt.

"The investment by Eton Park will help us achieve the vision of reaching 180 million tonne of cargo handling capacity by 2020," JSW Infrastructure chief executive officer BVJK Sharma had told the media after announcing the investment by Eton Park in 2010. It had announced plans to expand ports in Chile and Mozambique by investing roughly $100 million as it acquired coal and iron ore mines to fire its power plants and feed its steel units in India.

"After purchasing the stake from Eton, Jindal is planning to monetise a part of his stake in privately-held JSW Infrastructure as the sector has turned around with the economic activity picking up," two people with direct knowledge of the development said. An Eton spokesperson, however, denied any plans of a stake sale now.

"Due to the overall infrastructure sector being under pressure for the last three years, the valuations were beaten down," an investment banker said. "With a turnaround for the sector in sight, some of the strategic as well as private equity investors are rushing in to invest money."

Rival port operators say the cargo volume is expected to grow anywhere between 5% and 7% in the next few years as power producers and steel makers will import coal and iron ore miners will export.