Jindal Power and Steel on Tuesday said its board has approved divesting its entire equity interest in Jindal Power to Worldone, a promoter group company, for Rs 3,015 crore.
Jindal Power and Steel (JSPL) on Tuesday said its board has approved divesting its entire equity interest in Jindal Power to Worldone, a promoter group company, for Rs 3,015 crore. The board of directors of JSPL has approved the divestment of its entire equity interest (representing 96.42 per cent of the issued and paid up capital) in Jindal Power by way of sale of shares, to Worldone Pvt Ltd, a promoter group company and a related party to the company, JSPL said in a regulatory filing.
The equity value is an all-cash offer of Rs 3,015 crore, the company added.
JSPL said Worldone was selected by way of an elaborate bidding process run by an independent third-party merchant banker, Grant Thornton Advisory, wherein the acquirer submitted the highest binding bid on acceptable terms and conditions. The proposed sale is subject to necessary approvals of shareholders of the company, regulatory clearances, go-ahead from lenders of the company and Jindal Power, contractual approvals and such other consents, permissions and sanctions as may be necessary in line with extant relevant guidelines.
JSPL said the divestment is in line with JSPL’s strategic objective to continuously reduce its debt, focus on its India steel business and significantly reduce its carbon footprint by almost half as part of its ESG (environment, social and corporate governance) objectives.
The equity value is an all-cash offer of Rs 3,015 crore for 96.42 per cent stake in Jindal Power including 3,400 MW coal fired power plants in Chhattisgarh and other non-core assets owned by Jindal Power. V R Sharma, MD of JSPL, said this divestment is in line with the company’s ESG objectives to be amongst the top 10 lowest Co2 emitting steel companies of the world. “Looking to the future, JSPL will be a key growth driver in the Indian steel industry and will now focus on undertaking expansion of its Angul steel plant from 6 MTPA (million tonnes per annum) to 12 MTPA.
“Infrastructure spending in India is bound to grow exponentially and JSPL is fully aligned with GoI’s vision of achieving 300 MTPA steel production by 2030. We firmly believe in the India growth story and its potential to be an engine of global growth,” he said.
JSPL said the long stop date for completion of the proposed sale is 12 months which may be mutually extended by the parties thereto, failing which the proposed sale shall terminate. The company’s board also approved the execution of a binding share purchase agreement, a loan agreement and other ancillary agreements, in relation to the proposed sale and accordingly, the company has executed a share purchase agreement.
The share purchase agreement with the Worldone and Jindal Power captures the entire understanding between the parties in relation to the sale of shares held by the company. The company’s board also approved entering into a loan agreement with Jindal Power to convert the existing capital advances and inter corporate deposits availed by JSPL from Jindal Power aggregating to Rs 4,386.28 crore into an unsecured loan.