Abu Dhabi’s Al-Ghaith Holding (AGH) has given more time to India’s Jindal Group to finalise a deal to buy the Shadeed Iron & Steel (Shadeed) plant in Oman, a source tells MEED.
The source says that the initial date of 15 April has been extended to the 25 April in order for senior management figures from Jindal to elaborate on the remaining details of the deal. This differs slightly from earlier reports that said the deadline for an offer was 21 April.
“Jindal are about 95 per cent there,” the source confirms. “If they have been given extra time to formalise the deal, then the acquisition is close.”
The news will come as a blow to Emirates Steel Industries (ESI) who has already submitted its offer for Shadeed and had been the firm favourite to secure a deal in March. Initially, industry insiders saw Jindal as an outsider for Shadeed. But ever since the company completed due diligence it seems more and more likely that it could strike a deal. It is believed that both offers submitted for Shadeed were not significantly different.
Another source adds that previous concerns about a company from outside the GCC region struggling to secure a gas allocation for the facility have been resolved after reassurances from the Oman government. “The [Sultanate’s] government cannot prefer one party to another in cases such as this,” the source says. “Business is business.”
Shadeed is a 1.5 million tonnes-a-year (t/y) steel plant located at Sohar Industrial Port in the nothern Batinah region of Oman. Commissioning has now started at the plant and the first phase is due to be completed shortly, with full start-up expected for the third quarter of 2010. The plant is split into three phases and will have a capacity of 4 million t/y when completed. Future plans for the site include a seamless tube mill to manufacture seamless tubes, sections and bars for the Middle East market.