More money could flow to Gujarat in multi-million dollar share deal

Gujarat NRE shares have been put on hold as the company tries to raise $58 million in a deal which would see Jindal Steel increase its stake in the company.

Jindal Steel already owns more than 53 per cent of the Illawarra coal miner after a share deal in October, but a new exchange could see the Indian power and steel producer acquire 752 million extra shares in an accelerated rights issue.

Documents submitted to the ASX shows $6 million of the new capital will be used to pay workers and about $20 million will help clear debts with creditors and suppliers.

It is believed creditors include the ATO, mining suppliers and the NSW government.

When the Jindal deal is finalised, Gujarat plan to extend the rights of issue to other shareholders, in an allowance which would see them buy two shares for every three at 8 cents per share.

About 625 million new shares will be up for sale, with the company aiming to raise a further $49.85 million.

The total rights issue is expected to be finalised by mid-December.

Jindal stepped in to save the embattled Illawarra miner after it stopped paying workers and suppliers earlier this year.

While wages are now being paid with consistency, workers are still owed for superannuation and missed wages from September and October.

CFMEU district vice-president Bob Timbs said he would meet with new company boss Jasbir Singh today to discuss the issue, The Illawarra Mercury reported.

"There are still issues with regards to back pay and super payments that the union is trying to sort out," Timbs said.

"Our members are not all entirely happy with the schedule that has been set out by the company and we are hoping to resolve that as soon as possible."

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