Jindal Steel expects to conclude deal to sell Rs 7,401 cr stake in Jindal Power by Dec

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

"It is wonderful to acknowledge that our shareholders have shown faith in JSPL's ESG Vision. More than 90 per cent of shareholders have voted in favour of the Jindal Power divestment to the Worldone. 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 reporters.

Worldone 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 Rs 4,386 crore (approximately) will be by way of assumption and takeover of liabilities and obligations of JSPL in relation to 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.

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.