Shares of Jindal Steel and Power (JSPL) advanced as much as 3.55 per cent in the early trade on Wednesday after the company agreed to divest the 1000 MW 4(250x MW) unit of Jindal Power (JPL), located in Chhattisgarh in favour of JSW Energy as part of its monetisation plans.
Later, the scrip wiped off initial gains and closed 3.48 per cent down at Rs 66.60. The scrip opened at Rs 70 and touched a high and low of Rs 71.45 and Rs 66, respectively, in trade. Sensex closed 0.51 per cent down at 25,101.73.
JSPL has been looking to generate cash flows from select divestments to be in much stronger position to meet all its liabilities and emerge as financially strong and sustainable company in 2016-2017.
The board has approved the divestment of 1000 MW Power unit of Jindal Power, located in Chhattisgarh, into a special purpose vehicle (SPV), for the purposes of transferring the same to JSW Energy through sale of the entire share capital and other securities of the aforesaid entity in terms of the share purchase agreement for an enterprise value of Rs 6,500 crore plus the value of net current assets as on the closing date.
The valuation may vary based upon the achievement of PPAs as prescribed in the agreement subject to minimum of Rs 4,000 crore plus the value of net current assets as on the closing date.
Sajjan Jindal’s JSW Energy shares closed flat at Rs 66.60.