JSPL hopeful of concluding deal to sell 96.42 pc stake in Jindal Power by Dec

Jindal Steel and Power Ltd (JSPL) expects to conclude the deal to sell its 96.42 percent stake in its arm Jindal Power for Rs 7,401 crore to a promoters-owned firm World one by this year-end.

More than 97 percent of shareholders of the company on Friday approved the proposal to sell the 96.42 percent stake the company holds in Jindal Power for Rs 7,401 crore to World one.

''It is wonderful to acknowledge that our shareholders have shown faith in JSPL's ESG Vision. More than 90 percent of shareholders have voted in favor of the Jindal Power divestment to the World one. The company expects that by the end of this calendar year after all sorts of statutory clearances the divestment process will be over,'' official sources from JSPL told PTI.

World one will buy out all the equity shares and redeemable preference shares of JPL held by JSPL for a total consideration of approximately Rs 7,401 crore.

Out of total consideration, Rs 3,015 crore will be payable by cash, and the balance of Rs 4,386 crore (approximately) will be by way of assumption and takeover of liabilities and obligations of JSPL about inter-corporate deposits and the capital advances paid by JPL to JSPL.

The deal will also entail debt associated with JPL (of Rs 6,566.440 crore approximately as of December 31, 2020) moving out of JSPL's consolidated books, thereby, strengthening JSPL's balance sheet.

As announced earlier, the JSPL through an independent transaction advisor (Grant Thornton Advisory Pvt Ltd) had undertaken an additional competitive & publicly held bidding process for the sale of its entire stake in JPL, to maximize the value for our shareholders.

Advertisement for inviting Expression of Interest (EOI) from domestic and international bidders was published in the leading daily newspapers, however, JSPL did not receive even a single Expression of Interest (EOI), and therefore, the Revised Offer from World one was ipso facto selected as the winning bid by JSPL's Board.

The divestment of JPL is in line with JSPL's strategic objective to focus on its India steel business, become a net debt-free company, and significantly reduce its carbon footprint by almost half as part of its broader ESG objectives.