JSPL repays about Rs 650 crore interest dues by selling two oxygen plants
, ET Bureau|
Updated: Oct 15, 2017, 11.10 PM IST
KOLKATA: The Naveen Jindal flagship, Jindal Steel and Power Ltd (JSPL), has managed to repay its outstanding interest dues to lenders, using a large part of the proceeds of the Rs 1,121- crore sale of two of its oxygen plants to SREI Equipment Finance last week.
JSPL, which had defaulted on interest payments, said it should soon come out of the Joint Lenders Forum (JLF) formed by its lender banks. Like other debt-laden makers of the alloy such as Essar Steel, Bhushan Steel and Electrosteel Steels, JSPL was also referred to the forum of lending financiers.
JSPL said it has paid off nearly Rs 650-crore due to banks as interest payment using the proceeds of its recent sale and lease-back deal with SREI. The company was earlier placed on an ‘under stress’ list, with the JLF comprising the 31lender banks putting the company under strict monitoring.
“We will soon be out of the JLF. All our accounts are now standard and regularised. We look forward to investment-grade rating,” Naveen Jindal, chairman JSPL Group told ETin an exclusive interview on Sunday.
With the other steel companies being referred to the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, Jindal is hugely relieved that JSPL does not have to share a similar fate.
“Now banks will not lose a single rupee because of us,” he said, likening the exit from the JLF to clambering out of a debt sinkhole. In the last three years, the JSPL Group has paid nearly Rs 10,000 crore in interest payment to banks and Rs 6,000 crore in repayments. Its gross debt, spread across its steel and power businesses stands at nearly Rs 45,000 crore.
With the recently commissioned 4 million tonne (mt) blast furnace at Angul, Odisha fully operational, Jindal said he is optimistic.
“We will continue to work toward pruning our debt. We are ramping up capacity by 15% every month at Angul. The government’s policy measures like Minimum Import Price and anti-dumping duty to save domestic industry from unfair steel imports have also helped us. Introduction of GST too has been beneficial,” Jindal said.
By December 2017, JSPL aims to produce 2 lakh tonnes at Angul, raising the output to 3 lakh tonne by March 2018. Its total domestic steel production is slated to be around 5.5 mt in FY18 from 3.5 mt in FY17. JSPL’s earnings before interest, taxes depreciation and amortisation (EBITDA), is among the highest in the steel industry. At Rs 9,300 per tonne in Q1FY18, it is second only to Tata Steel and is likely to go up by 50% over last year, Jindal said.
JSPL suffered a blow in 2014-15 when the Supreme Court verdict de-allocated its coal blocks and slapped a retrospective levy of .`3,000 crore. This rendered the .`30,000-crore Angul project unviable.
JSPL, which had defaulted on interest payments, said it should soon come out of the Joint Lenders Forum (JLF) formed by its lender banks. Like other debt-laden makers of the alloy such as Essar Steel, Bhushan Steel and Electrosteel Steels, JSPL was also referred to the forum of lending financiers.
JSPL said it has paid off nearly Rs 650-crore due to banks as interest payment using the proceeds of its recent sale and lease-back deal with SREI. The company was earlier placed on an ‘under stress’ list, with the JLF comprising the 31lender banks putting the company under strict monitoring.
“We will soon be out of the JLF. All our accounts are now standard and regularised. We look forward to investment-grade rating,” Naveen Jindal, chairman JSPL Group told ETin an exclusive interview on Sunday.
With the other steel companies being referred to the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, Jindal is hugely relieved that JSPL does not have to share a similar fate.
“Now banks will not lose a single rupee because of us,” he said, likening the exit from the JLF to clambering out of a debt sinkhole. In the last three years, the JSPL Group has paid nearly Rs 10,000 crore in interest payment to banks and Rs 6,000 crore in repayments. Its gross debt, spread across its steel and power businesses stands at nearly Rs 45,000 crore.
With the recently commissioned 4 million tonne (mt) blast furnace at Angul, Odisha fully operational, Jindal said he is optimistic.
“We will continue to work toward pruning our debt. We are ramping up capacity by 15% every month at Angul. The government’s policy measures like Minimum Import Price and anti-dumping duty to save domestic industry from unfair steel imports have also helped us. Introduction of GST too has been beneficial,” Jindal said.
By December 2017, JSPL aims to produce 2 lakh tonnes at Angul, raising the output to 3 lakh tonne by March 2018. Its total domestic steel production is slated to be around 5.5 mt in FY18 from 3.5 mt in FY17. JSPL’s earnings before interest, taxes depreciation and amortisation (EBITDA), is among the highest in the steel industry. At Rs 9,300 per tonne in Q1FY18, it is second only to Tata Steel and is likely to go up by 50% over last year, Jindal said.
JSPL suffered a blow in 2014-15 when the Supreme Court verdict de-allocated its coal blocks and slapped a retrospective levy of .`3,000 crore. This rendered the .`30,000-crore Angul project unviable.
