Jindal Stainless looking for Debt reduction by 64 per cent

Debt-ridden Jindal Stainless steel aims to cut its 8580 crore debt by 64 per cent through operational and financial restructuring. The 64 per cent reduction will bring the debt to 3080 crores. The business restructuring plan includes the de-merger of its three wholly owned subsidiaries-Jindal Stainless(Hisar), Jindal United Steel and Jindal Coke.

The plan includes the de-merger of its undertakings comprising of the ferro alloys and the mining division and vesting these in JSHL, a wholly-owned subsidiary.

The restructuring is a third in last seven years.The last two restructurings did not show  much reduction in debt burden. But for FY15 the debt burden showed a decrease of 10.30 per cent from 11596.7 crores to Rs. 10403.37 crores. Cash & cash equivalents also reduced by 46.65 per cent to Rs. 72.82 crores from Rs.136.5 crores. The previous restructuring plans are starting to show their effect and a lump sum debt reduction by 64 per cent will further help the company to improve operational efficiency, improve cash flows, reduce interest cost, utilise idle capacity and improve cash flows, through longer tenure of the restructured loan.

Of the Rs 8580 crore of debt, about Rs 5500 crore would finally be off the JSL balance sheet. Of this, Rs 2600 crore was being transferred to Jindal Stainless Hisar, Rs 2400 crore to Jindal United Stainless and Rs 500 crore to Jindal Coke.

Jindal Stainless is the largest integrated manufacturer of stainless steel in India and is ranked among the top 10 stainless steel manufacturers in the world, with a capacity of 1.8 million tonnes (MT). On Thursday, 19 September the stock of Jindal Stainless was trading at 23.95, 57.31 per cent lower. Today stock is trading at Rs. 24.40, 1.46 per cent up from previous close.