Monnet Ispat is gearing up for its largest ever consolidation and may be set to sell stake in power and sponge business, sources tell CNBC-TV18. The company is likely to sell 87.5 percent in Monnet Power and 35.17 percent in Orissa Sponge. JSW Group is learnt to be talks to buy out these assets.
According to sources, JSW Energy and Tata Power are eyeing Monnet Power. JSW is said to be willing to spend up to Rs 4000 crore for the power business. The valuation of Monnet Power is pegged at about Rs 3500 crore, while that of Orissa Sponge’s stake is in the range of Rs 300-400 crore, which is being eyed by JSW Steel.
The buyer will have option of hiking stake in Orissa Sponge over the next 3-5 years, sources say. Monnet Ispat’s consolidated debt as of March 2014 stands at Rs 10,000 crore.
Replying to CNBC-TV18 query, Monnet Ispat said it is considering a strategic tie up in Monnet Power and had some initial talks with few companies. However, it denied having advance talks with any one company in particular. It also said that there is no such move regarding Orissa Sponge.
The remaining players were unavailable for comment.
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