Naveen Jindal’s brother resigns from board of cash-strapped JSPL
Naveen Jindal’s brother Ratan Jindal has resigned from the Board of Directors of the cash- strapped Jindal Steel and Power Ltd (JSPL).business Updated: Mar 31, 2016 01:19 IST
Naveen Jindal’s brother, Ratan Jindal, resigned from the Board of Directors of the cash- strapped Jindal Steel and Power Ltd (JSPL).
The resignation of Ratan, who is also the chairman and managing director of BSE and NSE-listed Jindal Stainless, comes into effect from on Wednesday.
“Ratan Jindal, director, has resigned from the Board of Directors of the company with effect from March 30, 2016 due to his pre-occupation,” JSPL said in a regulatory filing.
The development comes against the backdrop of brother Sajjan Jindal-led JSW Energy in final stages of negotiations with JSPL to buy the latter’s 1,000 megawatts (MW) power plant in Raigarh district of Chhattisgarh for around Rs 5,200 crore.
The move will help JSPL pare its debt.
For 2014-15, JSPL had a consolidated net debt of Rs 42,929 crore against a net debt of Rs 35,419 crore in 2013-14.
On the deal, JSPL said: “As per company policy we do not respond to speculations. As part of monetisation plans already advised, JSPL is looking at various options diligently to strengthen our balance sheets.”
JSPL’s finances were adversely impacted on account of cancellation of coal blocks as well as payment of additional levy of over Rs 3,300 crore on coal in 2014-15 and 2015-16 fiscal as a result of a Supreme Court order.
Besides, declining steel prices coupled with cheap imports impacted margins of domestic steel producers including JSPL, analysts said, adding that the sector globally has been impacted due to low demand from China and its over capacity.
Domestic industry has been impacted in terms of low sales realisation due to cheap imports affecting financial results over the last 4 quarters, they added.
Earlier this month, JSPL said: “In discussion with banks, we have launched 5/25 scheme, and also exploring various options with all lenders to reschedule payments considering likely short /medium term cash flow mis-matches.”
The steel-to-power group had then said it is trying to bring cash into company through -- divestment of assets and strategic collaborations through JVs -- that will add to its cash flows and also result in reduction in Bank Borrowings.
JSPL shares rose by 3.31% on Wednesday to settle at Rs 57.75 apiece on the BSE.