JSW Energy gains on restructuring JPVL debt

JSW Energy on Thursday entered into an agreement with Jaiprakash Power Ventures (JPVL) to restructure the principal outstanding amount of Rs 751.77 crore owed by JPVL.

JSW Energy rose 0.93% to Rs 70.20. It has traded in the range of Rs 70.80 and Rs 70.80 so far during the day.

Under key terms of the agreement, an amount of Rs 351.77 crore will be converted into equity shares of JPVL at a par value of Rs 1 0 each, according to an official statement.

Of the balance outstanding principal amount of Rs 400 crore, Rs 280 crore will be written off and Rs 120 crore will continue as debt to be paid by JPVL to JSW Energy. This will be paid quarterly on priority basis out of the available cash flows after JPVL has paid 10% of the restructured sustainable debt to its secured lenders.

The company had already made a provision for Rs 574.19 crore in the quarter ended March 31, 2018, for this.

Besides, JPVL and JSW Energy have agreed to waive their respective rights to receive any payments from each other and unconditionally release each other from all liabilities in relation to the securities purchase agreement signed on 16 November 2014, for transfer of Karcham and Baspa hydro assets from JPVL to the company. This will result in the reversal of an amount of Rs 177.48 crore of liabilities payable to JPVL in the company's books.

JSW Energy is an integrated power company primarily engaged in generation and sale of power. Its business segments include power generation, power transmission, mining, power trading and equipment manufacturing.

The company's consolidated net profit rose 11.7% to Rs 352.98 crore on 12.8% decline in net sales to Rs 2,118.55 crore in Q2 September 2019 over Q2 September 2018.

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