Jindal Steel & Power is looking to refinance more debt in India as well as abroad by next month, company’s Chief Executive Officer Ravi Uppal told Moneycontrol. Currently, the company's consolidated net debt stands at Rs 45,500 crore, which includes Rs 14,000 crore of overseas borrowing. The move will help the steel major bring down its interest cost.
Earlier, some media reports had said that the steel and power producer is keen on refinancing its debt in as many of its foreign subsidiaries as possible, especially in the Mauritius arm.
The company had in December 2016 restructured Rs 7,125 crore of 5-7 year debt into a long-term debt of 20 years, under the Reserve Bank of India’s 5/25 scheme, which allows restructuring of debt for up to 25 years with the flexibility of refinancing every 5 years.
On Tuesday, Jindal Steel also received an approval from its board to allow its lenders to convert their loans into equity if the company opts for debt restructuring. Uppal said this was only an enabling resolution and there was no plan to go for a strategic debt restructuring yet.
“What happens is when we are doing the restructuring of some of the loans and we are taking some more funding, one of the conditions they have is that if we don’t sort of honour our repayment and interest servicing, then they will resort to SDR as the ultimate instrument…It is for that purpose as the last resort,” Uppal told Moneycontrol.
For the quarter ending June 30, the Naveen Jindal-led company, which has been posting a loss for the past 9 quarters, said on Tuesday it has narrowed its loss. Uppal said a net profit was round the corner — in the third or the fourth quarter of the ongoing financial year.
“We started the recovery journey in a big way from Q3 last year. Q3, Q4, this Q1 and god willing, the Q3, Q4 this year should give us very positive results,” he said.
Jindal Steel’s consolidated net loss in the June quarter was Rs 421 crore against a net loss of Rs 1,240 crore in the corresponding quarter last year. Its interest cost in the June quarter was Rs 901 crore against EBITDA of Rs 1,353 crore.
Uppal revealed the company’s newest steel plant — a 6 million tonne/year unit at Angul in Odisha — has begun commercial deliveries on Monday. The plant was commissioned in May. “Hopefully in next 5 to 6-months, it will reach its full potential of 10,000 tonnes a day,” he said.
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