Jindal Strips In Move To Clean Balance Sheet

The Ratan Jindal-controlled Jindal Strips is cleaning up its balance sheet. Two of its `sticky' investments _ Jindal Vijaynagar Steel (JVSL) and real estate company BPM Industries _ are being moved out of the company's books and are being transferred to a new 100 per cent Jindal Strips subsidiary, Jindal Steel and Alloys.

"The cleaning up of the balance sheet is in accordance with the wishes of the financial institutions," says Jindal Strips vice-president (corporate finance).Arvind Parakh.

For a while now, the financial institutions have been telling Jindal to move these investments, especially JVSL shares, out of the Jindal Strips balance sheet.

Jindal Strips, a stainless steel company, has a cold rolling unit at Vasind near Mumbai.

This division is being spun off into a 100 per cent subsidiary and will be called Jindal Steel and Alloys.

Earlier, this division was proposed to be sold off to the Sajjan Jindal-controlled Jindal Iron and Steel Co (Jisco). But the proposal wasn't cleared by the financial institutions as Jisco itself was saddled with a huge JVSL stake.

The Vasind unit near Mumbai is now being made a separate company to be sold to Jisco at an appropriate time. In other words, the JVSL shares held by Jindal Strips will soon come to rest with Jisco.

The 3.5 million JVSL shares that are being transferred to Jindal Steels and Alloys represents around 0.3 per cent of the JVSL equity capital. But Jindal Strips sits on another 6 per cent of the JVSL equity held by its investment companies. Right now, there is no proposal to move these JVSL shares to Jindal Steel and Alloys.