The deal includes 3.4GW of coal-fired power plants in the central Indian state of Chhattisgarh
Jindal Steel & Power (JSPL), an Indian steel and energy company, has agreed to offload its 96.42% stake in its coal-fired power business to Worldone for INR30.15bn ($400m). Worldone is a company owned by the promoter group of JSPL. The business involved in the deal operates under the name Jindal Power. Its assets include 3.4GW of coal-fired power plants in the central Indian state of Chhattisgarh. Other non-core assets owned by Jindal Power are also part of the deal.
Jindal Power has four 250MW and four 600MW thermal power units in Tamnar. According to JSPL, the transaction is in line with its strategic objective to cut down its debt continuously, and focus on its Indian steel business. Besides, the deal will help the company to reduce its carbon footprint by nearly 50% as part of its environmental, social and governance (ESG) goals.
JSPL MD VR Sharma said: “This divestment is in line with our ESG objectives to be amongst the top 10 lowest Co2 emitting steel companies of the world. It is yet another step towards our vision to reduce debt substantially and create a robust balance sheet for our investors and stakeholders.
“Looking to the future, JSPL will be a key growth driver in the Indian steel industry and will now focus on undertaking expansion of its Angul steel plant from 6 MTPA to 12 MTPA. “Infrastructure spending in India is bound to grow exponentially and JSPL is fully aligned with GoI’s vision of achieving 300 MTPA steel production by 2030.”
JSPL had engaged US accounting company Grant Thornton as the transaction advisor. Grant Thornton is said to have undertaken a comprehensive sale process, and had reached out to various national and global investors for the coal-fired power business.
The deal will be contingent on the receipt of requisite approvals. These include approval by shareholders of JSPL and also approval from the company’s and Jindal Power’s lenders.