3,000 crore

The Economic Times - - Companies: Pursuit Of Profit -

or­gan­i­cally & in­or­gan­i­cally. How­ever, as a com­pany pol­icy we would not like to com­ment on a spec­u­la­tive ques­tions as it would be pre­ma­ture to do so till any of the deals be­ing eval­u­ated gets fruc­ti­fied,” a com­pany spokesper­son said.

A JSPL spokesper­son said: “As part of mon­eti­sa­tion plans al­ready ad­vised, we are look­ing at var­i­ous op­tions dili­gently to strengthen our bal­ance sheets.”

Com­pany of­fi­cials main­tained that JSPL’s fi­nan­cials have been ad­versely im­pacted due to the can­cel­la­tion of coal blocks and pay­ment of ad­di­tional levy on coal of more than .₹ 3,300 crore dur­ing FY14-16 as a re­sult of a Supreme Court or­der. Prof­itabil­ity of both its key steel and power busi­nesses has been im­pacted on the back of acute coal short­age, fall­ing re­al­i­sa­tion and no ma­te­rial im­prove­ment in util­i­sa­tion of re­cently com­mis­sioned as­sets, they said.

Like most steel peers, the com­pany is fac­ing cash crunch due to the sharp fall in re­al­i­sa­tions on the back of in­dus­try slow­down and cheap im­ports from China, Ja­pan, South Korea and Rus­sia flood­ing the mar­ket. The firm’s power as­sets are housed un­der Jin­dal Power Ltd (JPL), a sub­sidiary of listed flag­ship JSPL.

The pro­posed di­vest­ment will help to bring down JSPL’s con­sol­i­dated debt that at the end of FY16 is ex­pected to cross .₹ 48,000 crore. Un­der the pro­posed deal, Jin­dal Power is likely to split ver­ti­cally so that the Raigarh plant will be owned di­rectly by JSPL, and the pro­ceeds from its di­vest­ment will ac­crue di­rectly to the par­ent com­pany. ET re­ported about the im­pend­ing deal on March 18.

On a stand­alone ba­sis though, JPL has a bet­ter debt-equity pro­file than most of its peers. With an in­stalled ca­pac­ity of 3,400 MW, its to­tal debt at the end of FY16 is ex­pected to be at .₹ 6,708 crore.

Rat­ings agency Crisil Ltd has rated Jin­dal Steel and Power’s debt as de­fault,

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