Jindal Steel looking to sell more assets
The Dollar Business Bureau
Jindal Steel and Power is reportedly in talks with some resource firms to sell more of its steel and mining assets.
The loss-making company intends to close a $976 million power plant deal before mid-2018 deadline.
The company is looking to turn around its fortunes, as the company is trying to cut down on its March-end debt of about Rs.460 billion ($6.91 billion), which is over seven times its market capitalisation.
“Hopefully FY16-17 will see complete turnaround of JSPL, and we expect positive earnings at PBT level,” Jindal Steel and Power said in a tweet.
The New Delhi-based firm has agreed to sell a 1,000 megawatt power plant JSW Evergy for up to Rs.65 billion ($976.21 million).
Jindal Steel has recently been under pressure from several lenders, including State Bank of India (SBI), to repay its loans of about $121 billion. The loss making company is unable to get fresh loans from the lenders.
Jindal Steel registered its seventh straight quarterly loss. The company expects to sell about 35-40% more steel in the current financial year on the projection of a better market outlook and improved steel prices.
The Indian government has also indicated steps to reinvigorate state power companies, which gives the company ample opportunities to tap the market demand.
Besides the company’s steel and power plants in India, it also has a steel plant in Oman and coal mines in Australia, South Africa and Mozambique.
The company is looking for more liquidity, as it needs more working capital support. It will continue to stick to its expansion ambitions by exploring opportunities into transmission, distribution and renewable energy.