Jindal Steel & Power Ltd (JSPL) has accepted a binding offer from Worldone Pvt Ltd to divest its 96.42 per cent stake in its subsidiary Jindal Power Ltd.
In a release, JSPL that this divestment is in line with JSPL’s strategic objective to continuously reduce its debt, focus on its India steel business and significantly reduce its carbon footprint by almost half as part of its ESG objectives.
The equity value is an all-cash offer of Rs.3,015 crore for 96.42% stake in JPL, including coal-fired power plants with aggregate capacity of 3400 mw in Chhattisgarh, and other non-core assets owned by JPL.
JSPL will focus on its steel business in India, especially the upcoming expansion at its Angul plant in Odisha from 6 million tpa to 12 million tpa.
The divestment is subject to receipt of requisite approvals including approval from shareholders of JSPL, approval from lenders of JPL and JSPL, and such other statutory approvals, consents, permissions and sanctions.
Worldone Pvt Ltd: The acquirer
In a separate stock exchange filing, JSPL said that the acquirer (Worldone Pvt Ltd) was selected by way of an elaborate bidding process run by an independent third-party merchant banker, Grant Thornton Advisory Pvt Ltd, wherein the acquirer submitted the highest binding bid on acceptable terms and conditions.
Also read: Desulphurization Of Coal-Fired Power Plants Lagging Behind Schedule
The acquirer Worldone Pvt Ltd is a private limited company, incorporated in India in 1999, engaged presently in the business of investment holding. The acquirer is a part of the promoter group of the company. Naveen Jindal, Chairman of the Board and a promoter of the company, along with his relatives, holds the majority equity share capital of the acquirer.
Key growth driver
According to V.R. Sharma, Managing Director, JPSL, “This divestment is in line with our ESG objectives to be amongst the top 10 lowest Co2 emitting steel companies of the world. It is yet another step towards our vision to reduce debt substantially and create a robust balance sheet for our investors and stakeholders. Looking to the future, JSPL will be a key growth driver in the Indian steel industry and will now focus on undertaking expansion of its Angul steel plant from 6 million tpa to 12 million tpa. Infrastructure spending in India is bound to grow exponentially and JSPL is fully aligned with GoI’s vision of achieving 300 million tpa steel production by 2030. We firmly believe in the India growth story and its potential to be an engine of global growth.”
Featured photograph shows Jindal Power Ltd’s 1,000-mw Tanmar coal-fired power plant in Chhattisgarh.
