Jindal Steel pays dues worth Rs 700 cr to banks, stock rallies 4%
After this payment, the company may soon be out of SMA-2 category that it was placed under after its debt remained unpaid for more than 60 days.
Moneycontrol News
Jindal Steel & Power (JSPL) share price rallied 4.3 percent intraday Monday as the company may soon come out of the clutch of joint lenders forum.
The steel maker cleared its pending dues of around Rs 700 crore to banks a little over a week ago, according to the company's Chairman Naveen Jindal.
After this payment, the company may soon be out of SMA-2 category that it was placed under after its debt remained unpaid for more than 60 days.
SMA-2 is one step short of the account being declared a non-performing asset.
This could well pave the way for the Delhi-based steel and power producer to come out of the clutch of joint lenders forum.
SMA stands for special mention account and is used for troubled accounts under the norms of the Reserve Bank of India. SMA-0 is an account where the due is unpaid for up to 30 days; SMA-1 where the installment has not been paid for 30-60 days and SMA-2 where it is delayed for 60-90 days.
“Around 10 days back, we have cleared all the pending dues. We sold our oxygen plant for Rs 1,121 crore and with that, we have cleared the pending dues of all the banks. We can proudly say that JSPL account is ‘current’ today. We may be the first story to be out of JLF (joint lenders forum led by State Bank of India),” Jindal told Moneycontrol.
The company sold the oxygen plant at Angul to SREI Equipment Finance for the above consideration and then leased it back.
The company has a debt of Rs 24,000 crore against its domestic steel business (9 mtpa of steel manufacturing), Rs 8,500 crore under the power generation operations (3,400 MW) and Rs 12,400 crore for global business (2 mtpa integrated steel plant in Oman and 6.2 mtpa mining operations).
At 11:32 hours IST, the stock price was quoting at Rs 166.55, up Rs 3.90, or 2.40 percent on the BSE.
