Jai Balaji raises Rs 559 cr from Tata Capital FinServ to refinance debt

Jai Balaji was on the RBI's second list of non-performing assets (NPAs) in 2017-18 mandated for resolution under the Insolvency and Bankruptcy Code

Steelmaker Jai Balaji Industries has secured a loan of Rs 559 crore from Tata Capital Financial Services to refinance debt.

A debt agreement with non-banking financial company (NBFC) Tata Capital Financial Services has been executed to retire the existing debt held with two asset reconstruction companies (ARCs), the company said on Monday.

Chairman and managing director Aditya Jajodia said the debt agreement was a game changer for Jai Balaji and marked the beginning of a new chapter in its turnaround journey.

Jai Balaji was on the Reserve Bank of India’s (RBI’s) second list of non-performing assets (NPAs) in 2017-18 mandated for resolution under the Insolvency and Bankruptcy Code (IBC). It had a debt of about Rs 3,200 crore then.

However, Jai Balaji did an out-of-court settlement with some banks. A few banks sold the loans to ARCs – Edelweiss and Omkara.

Under the terms of the agreement with Tata Capital, Jai Balaji will utilise the borrowed funds to retire existing debt obligations held by the two ARCs. This will streamline its financial structure and pave the way for rapid and sustainable growth.

 The current debt is around Rs 560 crore. Jajodia said, “We are pleased to announce this strategic debt agreement with Tata Capital Financial Services.”

“This partnership signifies our commitment to fortifying our business and enhancing our operational capabilities. By retiring the existing debt held by ARCs, we are taking a proactive approach to strengthen our financial position, setting the stage for sustained growth,” he added. With the exit of the ARCs, the deal, according to the company, signifies the end of financial reconstruction and consolidation for the firm.

“This will further enhance our capabilities for future investments and expansion,” it said.

The long steel product player, with units in West Bengal and Chhattisgarh, has lined up a capex plan of Rs 500-600 crore over the next year and a half.

“This will be funded through internal accruals,” Jajodia said.