JSPL eyes dollar bonds to repay offshore debt
2 min read . Updated: 24 Feb 2020, 11:11 PM IST- The overseas units of the company have $750 mn debt
- JSPL’s plans come at a time when Indian firms have been very active in the dollar bond market
MUMBAI : Jindal Steel and Power Ltd (JSPL) is preparing to sell dollar-denominated bonds to refinance debt held by its overseas units, three people aware of the development said.
JSPL’s overseas operations include a steel plant in Oman and coal mines in Africa and Australia.
“They have a debt of around $750 million in their overseas business. They might do a single bond or tranches, which will be used to refinance the debt. They are in advanced stages of appointing a banker syndicate to work on these bonds," one of the three people said on the condition of anonymity as he is not authorized to speak to reporters.
The group’s performance has seen steady improvement, their capex investments have been completed and thus the financials are expected to improve going ahead, he said, adding that the group has also actively worked on deleveraging its balance sheet both at the operating company and at promoter level in the last 2-3 years.
An email sent to JSPL did not elicit a response.
JSPL’s plans to raise debt from the offshore bond market comes at a time when Indian companies have been extremely active in the dollar bond market, as attractive yields and liquidity drive investor interest for Indian debt paper.
According to data from financial markets tracker Refinitiv, 47 Indian companies raised $21.32 billion through offshore bonds in 2019, the highest both in value and volume terms in the last six years. The surge in activity followed a muted 2018, which saw only 12 companies tap offshore debt markets to raise $5.2 billion.
Major bond issuers last year included the likes of the Adani Group, which saw several of its companies—Adani Transmission, Adani Ports and Special Economic Zone and Adani Green Energy—raise debt from foreign investors, besides Tata Motors Ltd, JSW Steel Ltd, Renew Power Ltd and GMR-owned Delhi International Airport Ltd, State Bank of India and IndusInd Bank. The first two months of 2020, too, have seen frenetic fundraising activity in the dollar bond market by Indian companies.
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