Jindal Steel’s Jasbir Singh, who became Gujarat’s chairman after the Indian steelmaker lifted its stake of the coal producer to 53.3% through a Gujarat-saving share offer in mid-October, expressed sympathy to the workforce.

“Coming on top of the recent turmoil with employee’s wages and the fight to keep the mines operational, this is a bitter blow but one that is necessary for the sustainability of the mining operations into the future,’’ Singh said.

Blaming difficult market conditions, Gujarat expects voluntary redundancies or “natural attrition” to account for most of the job cuts.

The news only confirms suspicions that Construction, Forestry, Mining and Energy Union officials had since Jindal took a majority stake of Gujarat.

“This isn’t unexpected in that sense, because if they’re going to survive long term, they were going to have to do something like this and get to the real number of what it costs to operate a significant business like this,” CFMEU south western district secretary Graham White told the Illawarra Mercury.

“There’s no use having a job now if it isn’t going to be there in the future.”

In separate news, Gujarat has extended its retail entitlement offer from closing on December 17 to January 10.

The accelerated pro rata, non-renounceable entitlement offer is based on issuing two Gujarat shares for every three held at an issue price of 8c each.

Jindal has preserved its stake by taking up 726.88 million Gujarat shares for $58.15 million under the institutional component of the offer.

Money raised will go to paying outstanding creditors, outstanding workforce salaries, interest repayments, and working capital needs.

With almost $313 million of borrowing amid its current liabilities and more than $46.5 million owed to creditors, the various “risk factors” detailed in the offer prospectus included passages on the potential winding up of Gujarat, legal proceedings and its ability to operate as a going concern.