"Subject to the lenders approval, we will restructure our Rs 4,300-crore debt which will help us in avoiding shortfall in internal accruals earmarked for funding the second phase of Orissa expansion project and the possible default in repayment of loan," informed JSL Director (Strategy & Business Development) Arvind Parakh.
The proposed corporate debt restructuring (CDR) would also help the company to ward off the threat of its debt being declared as Non-Performing Assets or bad loans by the Reserve Bank, he added.
The company describes the 2.9:1 debt-equity ratio as "alarming but manageable" as it looks at its balance sheet after incurring second consecutive quarterly loss.
JSL Ltd, which has to pay back about Rs 2,000-crore loan in the next two years, is looking to buy more time from the lenders by way of undertaking the "voluntary CDR programme."
The move would help the firm to complete the project in the extended time frame of March 2012.
The stainless steel major is undertaking Rs 5,600-crore capacity augmentation programme in the second phase of the Orissa expansion project to set up an 8-lakh tonne per annum (LTPA) mill to produce the alloy.