JSWSteel to raise ~65 bn to repay debt, fund capital expenditure
Sajjan Jindal-led JSW Steel had proposed to raise $1 billion in bonds to repay debt and fund capital expenditure, sources close to the development told Business Standard.
“However, there is no clarity on the proportion of allotment,” sources added. Fitch Ratings has assigned a BB(EXP) (stable outlook) rating to Mumbai-based JSW Steel’s proposed US dollar senior unsecured notes. The final rating would depend on confirmation of information already received, the Fitch report said.
JSW Steel currently has an 18.1 million tonnes of installed steelmaking capacity. It plans to invest around ~270 billion during 2017-18 to 2020-21 on several projects, including in raising the steelmaking capacity at its Dolvi plant by 5 million tonnes per year by 2020 at a cost of ~150 billion. In addition, the company is also planning to expand downstream facilities and revamp capacities.
A successful completion of the projects should boost the company’s sales volume and profitability, Fitch said.
JSW Steel is also planning to acquire assets, including those undergoing insolvency proceedings. The company has shown interest in Bhushan Steel, Bhushan Power & Steel, and Monnet Ispat, with the intention of keeping a minority stake and ring-fencing itself from their liabilities. According to the Fitch report, the company has maintained a record of disciplined investment, which meant that at times it was not the highest bidder. “We believe this alleviates the risk to its leverage profile from its growth ambitions,” the rating agency said. JSW Steel’s consolidated net debt stood at ~433 billion on March 31, 2017.
Tata Steel is said to have emerged the highest bidder for both Bhushan Steel as well as the unlisted Bhushan Power. While the company has confirmed being the highest bidder for the Neeraj Singhal-led Bhushan Steel, the Sanjay Singhal-led Bhushan Power is undergoing insolvency proceedings in the National Company Law Tribunal (NCLT).