Jindal Steel and Power Ltd (JSPL) shareholders on Friday approved the deal to sell 96.42 percent stake in its arm Jindal Power for Rs 7,401 crore to its promoters owned firm Worldone, a source said.
Jindal Power stake sale to Worldone has been approved by the JSPL shareholders at EGM (extraordinary general meeting) held on September 3, 2021, the source told PTI.
JSPL has proposed to sell 96.42 percent stake in Jindal Power to promoter owned company Worldone, the source further informed.
Worldone will buy out all the Equity Shares and Redeemable Preference Shares of JPL held by JSPL for a total consideration of approximately Rs 7,401 crore, the source informed.
Out of total consideration, Rs 3,015 crore will be payable by cash, and the balance Rs 4,386 crore (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 Rs 6,566 440 crore approx. as of December 31, 2020) moving out of JSPL’s consolidated books, thereby, strengthening JSPL’s balance sheet.
As announced earlier, JSPL through an 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 maximise 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.