JSPL updates on Jindal Power Limited divestment

Jindal Steel & Power Limited's (JSPL) Board has accepted the Revised binding offer from Worldone Private Limited ("Acquirer"), to divest its 96.42% stake in Jindal Power Limited ("JPL"), a material subsidiary of Jindal Steel and Power Limited ("JSPL"). As highlighted in our notice dated 24 July 2021, key features of the Revised Offer are that Worldone will buy out all the Equity Shares and Redeemable Preference Shares of JPL held by JSPL for a total consideration of approximately INR 7,401 Cr of which (i) INR 3,015 crore will payable by cash, and (ii) the balance INR 4,386 Cr (approximately) will be by way of assumption and takeover of liabilities and obligations of JSPL in relation to inter-corporate deposits and the capital advances paid by JPL to JSPL. The deal will also entail debt associated with JPL (of INR 6,566 crores approx. as on December 31, 2020) moving out of JSPL's consolidated books, thereby, strengthening JSPL's balance sheet.

As announced earlier, JSPL through independent transaction advisor (Grant Thornton Advisory Pvt. Ltd.) had undertaken an additional competitive & publicly held bidding process for the sale of its entire stake in JPL, in order to maximize the value for our shareholders. Advertisement for inviting Expression of Interest (EOI) from domestic and international bidders was published in the leading daily newspapers, however, JSPL did not receive even a single Expression of Interest (EOI), and therefore, the Revised Offer from Worldone was ipso facto selected as the winning bid by JSPL's Board.

The divestment of JPL is in line with JSPL's strategic objective to focus on its India Steel business, become a Net Debt Free company and significantly reduce its carbon footprint by almost half as part of its broader ESG objectives.

Shares of Jindal Steel & Power Ltd was last trading in BSE at Rs. 421.85 as compared to the previous close of Rs. 425.75. The total number of shares traded during the day was 289154 in over 5301 trades.

The stock hit an intraday high of Rs. 427.25 and intraday low of 420.05. The net turnover during the day was Rs. 122398329.

Source : Equity Bulls

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