Jindal keen to snap up troubled steel companies
JSW Steel is keen to capitalise on the stress in the sector by acquiring distressed alloy companies so that it can expand its capacity faster, a top official has said.
“We are looking at distressed companies for acquisition,” JSW Steel Chairman Sajjan Jindal told a select group of mediapersons at an event here to commission the group’s port project over the weekend.
He was replying to a question on whether his company would be looking at acquiring distressed steel companies like Monnet or Bhushan Steel.
“JSW is in a position to consolidate this industry. And in case, anywhere in the world, if steel industry has to remain consolidated, there cannot be too many players,” Jindal said.
He said the steel sector was “passing through a difficult phase” with companies facing problems due to a collapse in prices following the 2008 financial crisis from which the global economy is yet to come out.
The billionaire industrialist, however, hinted that the worst is behind the steel makers with a recent surge in demand and prices, which is reflected in the numbers showing a jump in exports.
“I wouldn’t say the problems are behind us fully, but as of today the industry is doing well,” he said.
Jindal also thanked the finance and commerce ministries for measures, like antidumping duties and minimum support price, taken over the past year which have all helped the sector.
It can be noted that the sector is one of the most stressed, leaving banks with a pile of dud assets.
In some cases, banks have replaced the management after revamping their loans and converting their debt into equity, and then looking for buyers.
Stating that it is up to the finance ministry and the banks to decide on the future course of action on bad loans, Jindal underlined the need for adopting a “transparent” process to deal with bad assets.