Jindal Steel & Power Ltd is in the process of selling off its coal assets in Botswana to Maatla Energy for $150 million (about Rs 1,070 crore), as part of a plan to reduce its debt burden by up to Rs 5,000 crore in the current financial year. Naveen Jindal’s flagship company has been actively looking for monetising its international assets in Africa and Australia, while renewing its focus on the domestic market.
As part of the Botswana deal, Maatla Energy, a wholly owned subsidiary of MRD Holdings, will acquire 97.44% of the issued share capital of Jindal BVI from JSPL (Mauritius), according to a filing by JSPL with the Competition Authority in Botswana, a copy of which was seen by ET. Jindal BVI is into mining and metallurgy business with subsidiaries in Barbados, Bahamas, Mauritius and Botswana. It has seven subsidiaries in Botswana.
Shares of JSPL, which had hit a 52-week low on Tuesday, jumped on the news to close 9.55% higher at Rs 103.80 on the BSE Wednesday.
“Our target is to bring down our debt to around Rs 34,000-35,000 crore by the year end. In Q1 this year, JSPL has managed to cut down debt by Rs 1,500 crore. Our debt levels have thus come down from Rs 39,084 crore to Rs 37,621 crore,” chief financial officer Deepak Sogani told ET. “We are actively looking for opportunities and are open to monetising all our global assets, be it in Africa or Australia. We are also seeking options for partnerships in these markets,” he added.
While it is looking to exit Botswana, JSPL has a presence in South Africa and Mozambique in Africa. It is also present in Oman through a steel plant. Industry experts said the current slide in the steel market might not offer attractive valuations for the assets. As part of the global strategy, it has decided to also improve the operational performance of international assets.
In India, JSPL is looking at ramping up capacity of steel to 6.5 million tonnes this fiscal year, up from 5.2 mt in FY19. In the next year, it hopes to touch the 8-mt mark, the executive said.
Standalone net profit, which excluded numbers from subsidiaries and affiliates, fell 33% to Rs 224 crore on low steel prices, increased iron ore costs and higher interest charges, even though turnover grew 5% to Rs 7,085 crore. It posted Ebitda of Rs 1,608 crore and an Ebitda margin of 23% on a standalone basis. Interest charges rose 15% to? 697 crore.
In the past quarter, sale of rails more than doubled from a year earlier. On a standalone basis, steel and related products like slabs, blooms and billets, structural and rails production went up 17% to 1.57 million tonnes.
