Jindal Power and Steel (JSPL) on Tuesday said its board has approved divesting its entire equity interest in Jindal Power to Worldone, a promoter group company, for Rs3,015 crore.
“The board of directors of JSPL has approved the divestment of its entire equity interest (representing 96.42%of the issued and paid up capital) in Jindal Power by way of sale of shares, to Worldone Pvt Ltd, a promoter group company and a related party to the company,” JSPL said in a regulatory filing.
The company added that the divestment is in line with JSPL’s strategic aim of continuously reducing its debt, focussing on its India steel business and reducing its carbon footprint by almost half as part of its ESG objectives Worldone, the company said, was selected by way of an elaborate bidding process run by an independent third-party merchant banker, Grant Thornton Advisory, wherein the acquirer submitted the highest binding bid on acceptable terms and conditions.
“This divestment is yet another step towards our vision to reduce debt substantially and create a robust balance sheet for our investors and stakeholders,” said V.R. Sharma, MD- JSPL, adding that the company will now focus on undertaking an expansion of its Angul steel plant from 6 MTPA to 12 MTPA.
“Infrastructure spending in India is bound to grow exponentially and JSPL is fully aligned with the government’s vision of achieving 300 MTPA steel production by 2030. We firmly believe in the India growth story and its potential to be an engine of global growth,” he added.
The proposed sale is subject to necessary approvals of shareholders of the company, regulatory clearances, go-ahead from lenders of the company, and Jindal Power.
“Long stop date for completion of the proposed sale is 12 months which maybe mutually extended by the parties thereto, failing which the proposed sale shall terminate,” JSPL said.
The company’s board also approved the execution of a binding share purchase agreement, a loan agreement, and other ancillary agreements, in relation to the proposed sale, and accordingly, the company has executed a share purchase agreement.
The share purchase agreement with the Worldone and Jindal Power captures the entire understanding between the parties in relation to sale of shares held by the company.
The company’s board also approved entering into a loan agreement with Jindal Power to convert the existing capital advances and inter-corporate deposits availed by JSPL from Jindal Power aggregating to Rs4,386.28 crore into an unsecured loan.
