JSPL to move regd office to Chhattisgarh; gets nod for sale of power asset to JSW

It will take over 920 Mw of captive power from Jindal Power Ltd, its wholly-owned arm, and turn it into an IPP as part of restructuring

Jindal Steel & Power Ltd will move its registered office from Hisar in Haryana to Raigarh in Chhattisgarh. It will also take over 920 Mw of captive power from Jindal Power Ltd (JPL), its wholly-owned subsidiary, and turn it into a independent power producer as part of a restructuring exercise.

The company today announced it got shareholder approval through a ballot vote for the two proposals. Besides, the shareholders also approved transfer of 1,000 Mw power unit of JPL to a special purpose vehicle (SPV) for the purpose of transferring the same to Sajjan Jindal-controlled JSW Energy Ltd..

The board of directors of JSPL, vide a resolution passed by way of circulation on June 02, 2016, had decided to conduct Postal Ballot for seeking approval of the shareholders of the company on the three proposals.

All the Resolutions proposed by the management of JSPL have been approved and passed by the shareholders with the requisite majority on July 18, 2016, the company said in a statement. As per the Scrutinizers' Report, out of the total votes casted, more than 99 per cent were in favour of the resolutions.

Naveen Jindal, chairman, JSPL, said, "We are indeed overwhelmed by the response of our shareholders who have assented to our resolutions unanimously. With the passing of these resolutions, we are confident of strengthening our balance sheets, while we work diligently to fully utilize our capacities in Steel & Power."

On May 4 this year, JSW Energy announced it had agreed to acquire JSPL-owned Chhattisgarh thermal power plant for a sum of up to Rs 6,500 crore. While this is part of JSW's plan to achieve power generation capacity of 10,000 mw by 2020, the deal was viewed as bailing out brother, Naveen's JSPL, which has been looking to sell assets to get over liquidity issues.

JSPL would create a special purpose vehicle (SPV) Everbest Steel & Mining Holding Ltd for the purpose. JSPL has a consolidated debt of Rs 46,000 crore at the end of March 31, 2016.

Under the terms and conditions of the definitive agreement signed between the two companies, JSW Energy will pay an enterprise value of Rs 4,000 crore plus net current assets, which would be increased to Rs 6,500 crore if Jindal Steel is able to assure fuel security along with long term power purchase agreement (PPA) providing certain minimum return threshold. The plant currently has agreements for about 600 mw of capacity.

The deal has to be sealed before June 30, 2018. As on March 31, 2016, JSW Energy carries a net debt of Rs 15,000 crore on its books and has cash of Rs 300 crore.