Jindal restructuring proposal okayed

NEW DELHI, Nov 30: Jindal Strips' dramatic restructuring proposal was approved by its shareholders and its lenders last week. The proposa...

NEW DELHI, Nov 30: Jindal Strips’ dramatic restructuring proposal was approved by its shareholders and its lenders last week. The proposal involves hiving off the company’s cold rolling mill to group company, Jindal Iron and Steel Company (Jisco) and spinning off a new company called Jindal Steel and Power Limited.

The procedural formalities for the restructuring, including a nod from the Punjab and Haryana high court, are expected to be completed by mid January, next year. The new corporate set, which will retain Jindal Strips’ core business of making stainless steel and spin off related businesses, will become effective on April 1, next year, according to company sources.

Jindal Steel and Power will be carved out of the parent and comprise Jindal Strips’ sponge iron plant at Raigarh and power unit at Raipur. The output of the sponge iron unit increased to 2.04 lakh tonne between July and September from 1.78 lakh tonne in the third quarter of last year. Its turnover increased to Rs 172 crore from Rs 143crore during the same period.

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Jindal Strips’ cold rolling mill will be sold to Jisco, to match with its hot strip mill. Jindal Strips will now be made up of stainless steel facilities at Hisar in Haryana and high carbon, ferro chrome facilities at Visakhapatnam.

The output of the stainless steel division went up by 20 per cent in the third quarter of this year, to 57,107 tonne from 47,748 tonne. The turnover of the division increased to Rs 228 crore between July and September, from Rs 194 crore during the corresponding period last year.

Jindal Strips’ Rs 31.52 crore share capital will be reduced, retaining 60 per cent in the parent company, while the rest is apportioned to Jindal Steel and Power. The proposal was approved by shareholders and the company’s creditors at meetings convened by the Punjab and Haryana high court on November 27 and November 28.