JSPL to avail of 5/25 scheme to meet debt obligations

RBI had launched the scheme to allow longer repayment period of term loans to projects, which require elongated servicing period

Jindal Steel and Power Limited (JSPL) is considering various debt restructuring options, including the 5/25 scheme, to deal with rising debt obligations.

“Considering negative financial results in the last 12 months, the company has been working with all banks/institutions towards various options including 5/25 scheme to meet all obligations,” JSPL said in a reply to the BSE on Wednesday.

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Following media reports that foreign lenders might recall their $550-million loans to JSPL, the BSE had sought clarification from the company.

When contacted, a JSPL spokesperson declined to comment.

SEEKING LONGER REPAYMENT PERIOD

• The company has been working with all banks/institutions towards various debt restructuring options to meet all obligations, considering negative financial results in the last 12 months
• After media reports that foreign lenders might recall their $550-million loans to JSPL, the BSE had sought clarification from the company
• The Reserve Bank of India had launched the 5/25 scheme in July 2014, under which banks can refinance long-term loans every five years or so

Understanding the need to allow longer repayment period of term loans to projects, the Reserve Bank of India had launched the 5/25 scheme in July 2014, under which banks can refinance long-term loans every five years or so.

“It may be noted that the steel sector has been impacted negatively due to low sales realisation. Financial results of steel sectors have been negatively impacted due to reduction in sales prices. JSPL results have also been impacted in last four quarters. JSPL had excellent track record in nearly all its financial commitments over the years,” JSPL told the BSE.

To reduce steel import glut in India, the Union government recently imposed safeguard duty, minimum import prices as well as anti-dumping duty on specific steel products.

According to another BSE filing, the company had a one-on-one meeting with its lender Elo Mutual Pension Insurance Company on Tuesday. Similarly, it had a one-on-one meeting with another lender, ICICI Prudential, on March 3. To lower its debt burden, the company is also exploring to partially or completely sell its power assets.