Buyer to get 96.2% equity for Rs 3,015 crore; deal size also includes debt and preference capital
Shreya Jai |
Last Updated at April 27, 2021 16:59 IST
Jindal Steel & Power ltd (JSPL) has sold off its thermal power business to Worldone Private Limited, a company owned by the promoter group of JSPL. JSPL has divested 96.42 per cent stake in Jindal Power Ltd (JPL) to Worldone.
Industry sources said the estimated deal size is close to Rs 12,000 crore which includes Rs 6,500 crore of debt, Rs 7,000 cr redeemable preference shares and Rs 3,015 crore equity infusion. It also includes Rs 4,400 crore of an old debt which JPL had taken from JSPL.
“The divestment is in line with JSPL’s strategic objective to continuously reduce its debt, focus on its India Steel business and significantly reduce its carbon footprint by almost half as part of its ESG objectives,” JSPL said in a public statement.
It further said that the equity value is an all-cash offer of Rs. 3,015 crores for 96.42 per cent stake in JPL. This includes 3,400 Mw coal fired power plants in Chhattisgarh and other non-core assets owned by JPL.
JSPL has two coal fired power plants – Raigarh and Tamnar totaling 3400 MW. JPL earlier tried to sell the units to JSW Energy but the deal did not close.
“This divestment is in line with our ESG objectives to be amongst the top 10 lowest Co2 emitting steel companies of the world. It is yet another step towards our vision to reduce debt substantially and create a robust balance sheet for our investors and stakeholders,” said V R Sharma, managing director, JSPL.
He said the company will now focus on steel production and will double the production of its Angul steel plant to 12 million tonne per annum (MTPA).
The divestment is subject to receipt of requisite approvals including approval from shareholders of JSPL, approval from lenders of JPL and JSPL, and such other statutory approvals, consents, permissions and sanctions as may be necessary in line with the extant relevant guidelines, JSPL said.
JSPL informed that Worldone Private Limited is a private company owned by the Promoter Group, and managing & holding investments across various listed and unlisted companies.
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