JSPL sells Botswana Coal Mine for $150 mn to pare debt at parent level

Firm has a total outstanding debt of Rs 40,000 crore as on March 2019

Naveen Jindal-promoted Jindal Steel & Power Limited (JSPL) has sold off its Botswana coal mine, one of its major international ventures. The asset has been sold to Maatla Energy for $150 million.

The sale is part of the company’s plan to monetise its global assets to pare debt at the group level. JSPL has a total outstanding debt of Rs 40,000 crore as on March 2019. Responding to an emailed query, a company spokesperson was silent on the buyer’s name, but confirmed the sale of the project.

“The Company has entered into a share purchase agreement to divest its stake in the Botswana project for a consideration of around $150 million. Since the transaction is progressing at this time, the Company would not like to further comment on it, till the transaction consummates. Any proceeds from this divestment will be used to pare down debt,” said the emailed reply to Business Standard.

However, a regulatory filing made by JSPL to the Competition Authority to Botswana revealed the proposed acquisition of 97.44 per cent of the issued share capital in Jindal BVI Ltd (“Jindal BVI”) from, Jindal Steel & Power (Mauritius) Limited by Maatla Energy Limited (“Maatla Energy”).

Business Standard has reviewed the copy of the filing.

Further to the queries regarding use of the proceeds of the sale, the company’s spokesperson said, as part of its “International Portfolio Rationalisation plan”, renewed focus has been brought to the mines and minerals assets across Australia, Asia and Africa.

“The assets are being rationalised and monetised keeping in view their long-term viability, the raw material security for JSPL and the profitability of each of these businesses. The Group has been combing each asset, with a view of either exiting it or building it, to add to the bottom-line,” said the spokesperson.

Jindal Africa, a subsidiary of JSPL, bought the Botswana coal mine from CIC Energy for $116 million inn 2012, as part of its global expansion. The project plan also included setting up a 1,200-Mw power plant in the area. The company has investment and business ventures in other Southern African markets as well, such as Mozambique, Namibia, Zambia, Tanzania and Madagascar. However, with rising debt and global slowdown in the coal and steel market over the past few years, JSPL is selling off its international ventures to reduce its debt burden. 

Maatla Energy, which is now buying the project from JSPL, is a Botswana-based diversified group in the energy sector, with coal mining being its core business.