Jindal Steel & Power (JSPL) has submitted a debt resolution plan to its lenders, sources with direct knowledge of the development said. The plan includes a provision for raising capital through sale of equity both in India and overseas, along with one to raise more debt from banks (to complete work on a steel facility that is crucial to the debt reduction), bankers said. A part of the $18-billion OP Jindal Group, JSPL has iron and steel plants in Chhattisgarh, Odisha and Jharkhand in India, and also in Oman. The total debt of the company stood at Rs 38,703 crore as on September 30, 2017, according to Bloomberg data. JSPL is likely to raise capital through a qualified institutional placement (QIP) in the next financial year to pare debt, one of the sources quoted above said. The company is also looking to divest some stake in its Oman steel plant, the source added. The amount of capital to be raised through this route is still being finalised.
The company has, in the interim, sought close to Rs 1,800 crore of fresh debt from banks to complete work at the facility coming up at Angul in Odisha. Sources contend that the company’s debt repayment capacity will go up substantially after the expansion at JSPL’s Angul plant is completed. The expansion, which will double the plant’s steel-making capacity to 5 million tonne per annum (MTPA) from 2.5 MTPA at present, could be completed by the end of this month. “It will most likely do an initial public offering for its Oman operations in the next 8-10 months.
The QIP in India is likely to happen in the second quarter of the next fiscal,” one source said. JSPL had acquired Shadeed Iron & Steel’s 1.5 MTPA capacity plant at the Sohar Industrial Port area in Oman in 2010. In April 2014, the company commissioned its 2 MTPA integrated steel plant in Sohar. The plan supplies steel to the West Asian and North African countries. While JSPL did not comment on specific details of the debt reduction plan, the official spokesperson of the company said in an email response: “All loan accounts of JSPL are standard and regular. There is no overdue from JSPL to any bank. The company is confident of servicing its financial obligations in line with its debt repayment road map.”
The spokesperson also said in the next three-four years, JSPL plans to substantially reduce debt and also raise equity. JSPL reported a consolidated net loss of Rs 2,537 crore on total income of Rs 22,706 crore for the year ended March 31, 2017.