Blackstone buys 7% stake in Monnet Ispat for $50 mn

NEW DELHI: US-based Blackstone Group has acquired 7.12% equity in Monnet Ispat & Energy for $50 million (about Rs 230 crore), sources close to the development said.

The group's private equity arm Blackstone Capital Partners has purchased 4.5 billion shares of Monnet Ispat & Energy from the company's existing shareholders.

The sources said Blackstone might demand a board seat in Monnet Ispat if the stake is further raised to 10%. "Blackstone has been purchasing shares of Monnet Ispat & Steel in the open market for the last 15 days. This is an exclusive investment by Blackstone Capital Partners that is a pure private equity firm and does not invest through open market,' the sources said.

Officials of Blackstone group and Monnet Ispat were not available for comments.

With the purchase, Blackstone's investment in Monnet group has gone up to $110 million. Blackstone group has already made an investment of $60 million for 12.5% equity stake in Monnet Power Company Ltd, a subsidiary of Monnet Ispat & Energy.

Blackstone had earlier said that it plans to invest about $2-3 billion in India. It has investments in several Indian firms including garment maker Gokaldas Exports, Jagran Prakashan, and Emcure Pharmaceuticals. "With the purchase, Blackstone is looking at tapping value of both Monnet Ispat and Monnet Power," the sources said.

Monnet Ispat & Energy is implementing a greenfield 1.5 million tonnes per annum integrated steel plant in Chhattisgarh with $1 billion investment. The project's captive 80-mw power plant will be ready for commercial operation from early next month. Excess power from the project would be sold in open market.