JSPL to Sell Jindal Power to Cut Debt - ET
Economic Times, citing several people in the know, reported that Jindal Steel & Power will sell its entire stake in the power subsidiary Jindal Power Ltd in order
Economic Times, citing several people in the know, reported that Jindal Steel & Power will sell its entire stake in the power subsidiary Jindal Power Ltd in order to bring down its overall debt of INR 28,000 crore and reduce carbon emissions within the group. Sources told ET “The divestment is at a reasonably advanced process, in the sense, the buyer hasn’t been decided yet, but we do know that there is enough interest from more than one buyer; we have been receiving EoIs. A deal may be concluded by the end of this month.”
Sources added “The company has talked about becoming net debt-free in its last annual report FY20, and with this divestment, the debt levels will come down substantially.”
Jindal Power has three power plants located at Tamnar in Chhattisgarh with a total power generation capacity of 3,400 megawatts. While JPL has been a profitable business, deallocation of coal block and lack of power purchase agreements in India over the past few years has seen the majority of the asset being stranded. In 2019, Jindal Power decided to divest a 1000MW thermal power plant and JSW Energy was the preferred buyer. However, the deal did not go through as some conditions in the purchase agreement were not met.