Jisco to declare payout after formal merger

Jindal Iron & Steel Company (Jisco), the merged entity, will declare a dividend after a formal merger between the erstwhile Jisco and Jindal Vijaynagar Steel is completed, Sajjan Jindal, chairman, said today at Jisco's annual general meeting. Neither of the companies has declared a dividend for 2003-04.

The manufacturing assets of Jisco are being amalgamated with Jindal Vijaynagar Steel. The new entity is being called Jisco. The investments of the erstwhile Jisco are being hived off into a separate company called Jindal South West Holdings.

"We have already received approval from the Mumbai High Court for the merger and are awaiting approval from the Karnataka High Court. We expect that these formalities will be completed by January after which there will be a board meeting of the merged entity to decide on the dividend," Jindal said.

Meanwhile, the group is also looking at reducing its debt significantly by the end of this year. The consolidated debt of the merged entity as on December 31, 2004, is Rs 4,100 crore.

It is expected to come down to Rs 3,600 crore by March 2005. "The debt gearing will come down to around 1.25:1 by March 2005, from 2.68:1 in March 2004," Jindal said.

Jindal also elaborated on the company's futures plans which include setting up of a five million tonne integrated steel plant in West Bengal.

"We are looking at the possibility of a split location steel plant near Kharagpur, as the raw material for this steel plant is in Jharkhand," Jindal said.

The company is negotiating with the Jharkhand government for acquiring iron ore mining leases in the state. The investment of the steel project is estimated to be around Rs 12,000 crore, half of which will be met through internal accruals.

The plant will be commissioned in two phases of 2.5 million tonne each. "We will be manufacturing billets and slabs. While billets will be sold in the domestic market, slabs will be exported," Jindal said.