Jindal Power divests 4.12% holding in India Energy Exchange

Expects to realise consideration within the current financial year

As part of the monetisation plan, Jindal Power Limited, a subsidiary company of Jindal Steel & Power Limited (JSPL) has entered into a definitive agreement to divest 4.12% holding in India Energy Exchange at an undisclosed amount and is expected to realise the consideration within the current financial year.

JSPL financials have been adversely impacted due to the cancellation of coal blocks and payment of additional levy on coal of more than Rs 3,300 crore in FY 14-15 & 15-16 as a result of a Supreme Court order.

Besides, the steel sector globally has been impacted due to reduced demand from China and it’s over capacity, the company said. The company said JSPL’s investment in enhancing steel capacities in Angul and power capacity in Jindal Power (JPL) Tamnar have been completed / commissioned; and are in stable level of operation.

"With these additional capacities and better outlook for steel demand /fair sales price realisations, and better outlook for power demand / realisation, JSPL will be in a better position to generate higher cash flows as compared to the last four quarters. Our efforts in bringing cash into company through divestment of assets and strategic collaborations through JVs, will add to our cash flows, and also result in reduction in Bank Borrowings," the company said in a press note.

The company said it had met all its financial commitments till November-December 2015 and was in discussion with banks. It has adopted RBI's 5/25 scheme, besides exploring various options with all lenders to reschedule   payments considering likely short /medium term cash flow mis-matches.