Jindal Stainless gets court's approval for de-merger plan

Company had earlier announced its plans to de-merge its ferro-alloys, coke oven and stainless steel businesses into three different entities via the slump sale route

Debt-laden Jindal Stainless today said the High Court of Punjab and Haryana in Chandigarh has approved the company's scheme of arrangement between Jindal Stainless, Jindal Stainless (Hisar), Jindal United Steel and Jindal Coke and their respective shareholders and creditors.

Through a BSE notification, the company said it is in the process of obtaining certified copy of the High Court order.

In December last year, Jindal Stainless had announced its plans to de-merge its ferro-alloys, coke oven and stainless steel businesses into three different entities via the slump sale route in order to reduce its mounting debt and to ensure better management of its business verticals. As on March 2014, the company's consolidated debt stands at about Rs 12,000 crore.

 

Jindal Stainless, a part of the O.P. Jindal Group, has been recording losses for the past three years and has also witnessed negative margins despite rising revenue stream, mainly because of higher expenditure and increasing finance costs.

Last week, the company said it will temporarily shut down operations of the ferro alloys unit in Vizianagaram (Andhra Pradesh) due to differences between the management and workers.

In a BSE filing, the company had said, "Due to pending differences between management and workers who have lately been resorting to go-slow and other disruptive tactics, management has decided to temporarily shut down operations of the Ferro Alloys unit at Kothavalasa in Vizianagaram, Andhra Pradesh."

Shares of Jindal Stainless today ended 10% higher from previous close at Rs 48.75 on the BSE.