"JSW Energy is in last leg of negotiations to seal a deal with Jindal Steel and Power Ltd for buying its 1,000 MW power plant in Raigarh district for around Rs 5,200 crore," a source privy to the development said.
A formal announcement in this regard may be done next week by both the companies due to extended weekend on account of Holi and Good Friday, the source added.
"Whenever any proposal is finalised, the Company will comply with the provisions of the Listing agreement entered and make the requisite disclosures accordingly," the spokesperson added.
A Jindal Steel and Power spokesperson said, "As per company policy we do not respond to speculations. As part of monetisation plans already advised, JSPL is looking at various options diligently to strengthen our balance sheets."
Also Read
The consolidated debt of Naveen Jindal-led JSPL is around Rs 46,000 crore. This deal will help the company to pare its debt.
The fuel cost for the April-June quarter of 2016-17 was
at Rs 1,041 crore, up by 6 per cent from Rs 983 crore in year-ago period. It was higher primarily due to increase in thermal power generation, increase in the transfer price of lignite at Barmer and currency depreciation; partly offset by the decrease in landed cost of imported coal principally due to a softening of the international prices.
The consolidated net worth and consolidated net debt as on June 30, 2016 were Rs 10,232 crore and Rs 13,836 crore respectively, resulting in a Net debt to equity ratio of 1.35 times.
"Weak merchant power prices and recent hardening of international coal prices are expected to put pressure on margins. We expect the merchant demand and prices to remain benign unless pick-up in economic activity drives significant demand improvement."
Sajjan Jindal in his speech during JSW Energy AGM said that the Indian economy grew by 7.6 per cent in FY 2015-16, making it one of the fastest growing large economies in the world. Sustained economic growth, growing urbanisation and thrust on manufacturing sector continue to drive electricity demand in India.
"One of the key strategic measures taken to unleash the potential of the power sector last year has been the Ujwal DISCOM Assurance Yojana (UDAY) aimed at financial turnaround and revival of Power Distribution Companies...Execution holds the key to this game changing reform for the sector in the long-term," he said.
"As the thermal generation space matures, and with many stressed assets, consolidation is anticipated in the space. We are well positioned to leverage our strong balance sheet to capitalise on this consolidation opportunity," he added.