Hit hard by rising interest costs in the last financial year, Jindal Stainless has approached lenders to reschedule repayments of its over Rs 9,000 crore debt.
By reworking the debt payment schedule, the largest domestic stainless steelmaker is seeking to maintain cash for its operations till its new 800,000-tonne Odisha capacity begins production at optimum level, the company's Executive Director (Finance) Jitender Verma told PTI.
"We are in negotiations with our lenders, both domestic and international, to rework the payment schedules, so that there is no pressure on our liquidity. We hope to finish the negotiations in next 3-4 months," he said, adding the company does not have plans to convert debt into equity.
Debt-equity ratio of the company, which is already under under Corporate Debt Restructuring (CDR) programme, has increased to 5.17 in the last fiscal from 4.04 in FY'11.
According to the company's results, a rise of about 33 per cent in its interest costs at Rs 516.80 crore and forex losses of Rs 207.76 crore were largely responsible for company reporting a standalone net loss of Rs 103.90 crore in FY'12.
As on March, 2012, the company had liquid cash of Rs 164 crore to run its operations.
However, it is hopeful of returning to profitability after the Odisha plant begins production at peak level next year, Jindal Stainless' (JSL) President and Executive Director Ramesh Nair said, adding that optimum production is expected by June, 2013.
"Once the Odisha plant produces at optimum level, profits itself will take care of the interest costs. So, we are not worried very much on that and trying to maintain the liquidity (by reworking the debt repayment schedule)," he said.
JSL had commissioned 8 lakh tonne per annum new plant at Odisha's Jajpur last year. Currently, the plant is producing at about 60-65 per cent of its capacity.
The company currently has a total production capacity of about 1.8 million tonnes and has plans to increase it further to 2.5 million tonnes in a couple of years.
To run its operations, it requires about 800,000-900,000 tonnes of chrome ore and 1.2 million tonnes of coal.