Jindal Steel & Power drives down debt
Naveen Jindal and family undertook an ingenious way to reduce the debt burden of Jindal Steel & Power Ltd.
JSPL, where Naveen — younger brother of steel magnet Sajjan Jindal of JSW Group — is the principal promoter and chairman, sold the Oman business for an enterprise valuation of $1billion to a Mauritius-based company belonging to the promoter group.
Templer Investments Ltd, Mauritius, is an investment company and part of the promoter group of JSPL, agreed to buy JSPL’s step down subsidiary Jindal Shadeed Iron & Steel Co LLC (JSIS Oman).
The transaction will in effect mean the promoters of JSPL stepped up to reduce the debt burden of the publicly listed company by buying out its overseas asset. JSPL operates two integrated steel plants at Angul (Odisha) and Raigarh (Chhattisgarh).
Commenting on the transaction, V.R. Sharma, MD of JSPL, said, “This sale is in-line with our vision to reduce debt and create a much healthier balance sheet for our investors and stakeholders. We firmly believe in the India growth story.”
The company expects the transaction to close in a month, subject to approval from the shareholders of JSPL and lenders of JSIS Oman, among others. JSIS Oman is based in the port city of Sohar. It has a direct reduced iron plant, a steel melt shop, and a rolling mill. It produces steel billets and rebars.
JSPL is part of the $22 billion empire which was founded by O.P. Jindal, father to Sajjan and Naveen.