Naveen Jindal-led Jindal Steel and Power (JSPL) has sold its two oxygen plants, located in its integrated steel units in Raigarh and Angul and having 3,638 tonne per day capacity, to Srei Equipment Finance for `1,121 crore to part fund its debt obligation which stood at around `45,500 crore as on June-end.
At the same time, the debt-laden firm has also entered into a leaseback agreement with the Kolkata-based company to run the two oxygen plants for continued operations of the steel manufacturing units.
“The divestment of oxygen plant assets is a significant development to make JSPL an asset-light company so as to further enhance the inherent cost efficiencies,” said JSPL CEO (steel business) Naushad N Ansari in a release.
Though Srei Equipment Finance will be the owner of the oxygen units, JSPL will continue to manage these plants.
Jindal has been talking on divesting its non-core assets to pare debt for sometime now. The divestment of the oxygen plants, though not typically non-core in steel
business, forms part of its asset sweating road map.
Of JSPL’s total debt, `25,000 is in domestic steel-making business, Rs 8,500 crore in power generation assets and the remaining is in its overseas assets in Oman, Australia and Mozambique, among others.
The company had reported `420 crore loss in the April-June quarter of the current financial year.