The turnaround of Ispat, which hinges on one to two per cent reduction in interest rates, could be a casualty of the Reserve Bank of India’s (RBI) decision to raise key policy rates. The repo rate has, in fact, gone up by 1.75 per cent since December when JSW acquired Ispat.
JSW Steel is looking to refinance Rs 7,000-crore debt on the books of Ispat Industries, now JSW Ispat. At the time of the acquisition, JSW Steel had said it would be able to restructure the debt and would aim to get a reduction in interest rates of about one to two per cent.
Seshagiri Rao, joint managing director and chief financial officer of JSW Steel, said, “Earlier we thought we would be able to achieve savings but after having seen the kind of interest rate increases in the past few months, we may not be able to achieve what we had thought earlier. But there will be ‘some’ savings which we will be able to share with you once we sign the documents.”
State Bank of India and Bank of India are the lead syndicators for the debt restructuring.
The company said it was working on the turnaround strategy for Ispat. “We are working on three-four areas on how to make it profitable as early as possible. So, synergies like sales rationalisation are almost complete.”