JSW Steel hopes to turn around Monnet Ispat in a year: Jindal
Jindal believes his company JSW Steel will turn around and merge the bankrupt Monnet Ispat with itself within a year.
“We will eventually merge Monnet Ispat into JSW Steel and it will be a JSW brand. Our past experience is normally we turnaround in one year, so we hope that will happen,” Jindal, chairman and managing director of JSW Steel, said on the sidelines of the company’s annual shareholder meeting on Tuesday.
Last week, the National Company Law Tribunal (NCLT) approved AION-JSW Steel consortium’s ₹2,875 crore takeover proposal for the 1.5 million tonne asset in Chhattisgarh run by Monnet Ispat and Energy.
Located close to the mineralrich belts of Chhattisgarh and Odisha, this acquisition will be crucial in extending JSW’s reach in the central and eastern markets.
JSW has also tossed its hat in the ring for the 10 million tonne steel capacity of Essar Steel.
Jindal declined to comment on the plan because the eligibility of some bidders is being evaluated by the courts. He also declined to comment on the company’s interest in buying out the specialty steel business of Usha Martin. JSW and Vedanta are believed to be interested in buying out the stressed units of the Kolkatabased Usha Martin.
In his speech to shareholders, Jindal said that JSW delivered a record performance in FY 2017-18. “During the year, we have achieved the highest-ever production, shipments, revenues, and EBITDA. As a result, the net profit after tax grew by 76% YoY to ₹6,113 crore. With a 16% return on capital employed, JSW Steel is amongst the top 5 steel companies globally.”
In his outlook for FY19 he said, “with a 93% capacity utilisation targeted for the current year, there is a limited headroom to deliver volume growth till we complete our expansion projects by March 2020. Nevertheless, there are a number of other strategic levers which will help us to continue to improve our profitability over the next two years.”