Jindal Stainless exits from Corporate Debt Restructuring framework

Stainless steel maker Jindal Stainless Ltd (JSL) on Thursday announced its exit from the Corporate Debt Restructuring (CDR) framework. CDR is a scheme designed by the Reserved Bank of India (RBI) under which banks and financial companies aid those companies, which are facing financial difficulties due to internal or external factors, to restructure their debts.

In a BSE filing, JSL said it announces its successful exit from the Corporate Debt Restructuring (CDR) framework with effect from March 31, 2019. JSL on Tuesday received a letter from the consortium of CDR lenders to this effect.

"Pursuant to this, existing CDR lenders have realised the full recompense of about Rs 275 crore in cash, which will add to their income in the current fiscal itself. "Additionally, JSL has fully redeemed the outstanding Optionally Convertible Redeemable Preference Shares (OCRPS), which were issued to the lenders in June 2017, and has paid around Rs 558 crore, taking the aggregate realisation of lenders to around Rs 833 crore," the company said.

Earlier, the promoter group entity infused equity and subsequently JSL issued Non-convertible Debentures (NCDs) worth Rs 400 crore to Kotak Special Situations Fund (KSSF). These funds assisted JSL in redeeming the OCRPS, it said. "The exit...underlines the improvement in JSL's liquidity profile and profitability. This will not only provide financial and operational flexibility to our business, but will pave the way for a new growth phase. We are grateful to all our stakeholders, especially our lenders, for their continued faith in us," JSL Managing Director Abhyuday Jindal said.

The CDR tenure was prolonged as sustained imports impacted our top-line growth, he said. Consistent dumping of stainless steel flat products over the past several years from China and ASEAN countries continued to hurt the margins, causing undue financial stress, Jindal said.

"Surplus production in these countries is being re-channelled to growing markets like India. "Trade remedial measures like Anti-Dumping Duty and Countervailing duty imposed on imports by the government to create a level-playing field are being consistently circumvented, rendering these remedial measures ineffective. However, de-bottlenecking and internal process improvements helped JSL sustain its operations," he further said. PTI ABI BAL.