Oct 9: Jindal Steel and Power Ltd (JSPL), part of the $18-billion Jindal Group, on Monday announced that the company has consummated sale of its oxygen plant assets at Rs 1,121 crore with SREI Equipment Finance Ltd.
Under the transaction, JSPL has divested its oxygen plant assets at its integrated steel plants at Raigarh (Chhattisgarh) and Angul (Odisha) and received a total consideration (inclusive of taxes) of Rs 1,121 crore. JSPL and SREI Equipment Finance Ltd have also entered into a lease back agreement of the oxygen plant assets for continued operations by JSPL for manufacturing of steel at the respective plants.
Naushad A Ansari, CEO-Steel Business, JSPL said, “the divestment of oxygen plant assets is a significant development to make JSPL an asset-light company, so as to further enhance the inherent cost efficiencies. JSPL will continue to manage these cutting-edge oxygen plant capacities for its 9.6 MTPA domestic steel plants under a lease back agreement, thereby retaining full operational control.”
Meanwhile, the company has commissioned India’s largest 4 MTPA blast furnace in Q2 FY 2017-18 to mark the completion of its 6 MTPA integrated steel plant at Angul (Odisha). According to the company, the scheduled commissioning of the Basic Oxygen Furnace (BOF) at Angul during this quarter will further strengthen its cash flow streams.
Based in Delhi, JSPL is a leading player in steel, power, mining, oil and gas and infrastructure in India. The company produces steel and power through backward integration from its own captive coal and iron ore mines. It is the third largest steel producer in India in terms of tonnage. The company also manufactures and sells sponge iron, mild steel, slabs, ferro chrome, iron ore, mild steel, structural, hot rolled plates and coils and coal-based sponge iron plant. Its business operations span across Asia, Africa and Australia.
JSPL shares rallied nearly 6% to touch a fresh 52-week high of Rs 1,121 crore intraday Monday on BSE after the news came in. At 11.40 am, the Re 1 face value shares were trading at Rs 158.05, up 3.71% from the previous closing of Rs 152.40.