Jindal Steel and Power Ltd (JSPL) announced a restructuring plan for its subsidiary, Jindal Steel & Power (Mauritius) Ltd, which will reduce outstanding loans extended by JSPL to JSPML by Rs 7,776.51 crore. In a regulatory filing, the company said that based on a comprehensive review of the balance sheet of JSPML, it approved the restructuring of the balance sheet of the company. “Restructuring the balance sheet of JSPML will result in a diminution in the value of outstanding dues being loans extended by the Company to JSPML to the extent of Rs 7,776.51 crore,” it said in the filing. 

The company said that after evaluating the situation, JSPL determined that it would be difficult to recover its investments in JSPML in the near future. Jindal Steel & Power Limited had made strategic investments in JSPML, which, in turn, made investments in mining assets globally. JSPML has made continuous efforts to turn the operations of the underperforming overseas subsidiaries through the infusion of requisite funds even as the said subsidiaries were not able to turn around as envisaged due to various reasons.

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It said, “In light of various circumstances including but not limited to global economic uncertainties, JSPML and its subsidiaries suffered various operational and financial difficulties which have, in turn, resulted in significant erosion in the value of investments permanently.”

“This restructuring will not impact JSPL’s income statement because provisions for losses have already been made in the previous financial year,” said the company while adding that the promoter, promoter group and group companies have no involvement or interest in this restructuring.

Earlier, JSPL had posted a nearly 70 per cent decline in its consolidated net profit to Rs 465.66 crore for the March quarter of FY2022-23 due to higher expenses.The company had clocked Rs 1,527.04 crore “net profit after tax from continuing operation” during the January-March quarter of 2021-22. The company’s total income during the quarter fell to Rs 13,707.69 crore from Rs 14,341.91 crore in the year-ago period. Total expenses were at Rs 12,748.70 crore as against Rs 11,914.31 crore.