JSPL-Oman steel asset sale completion key for benefits of debt reduction

Deal valuation is good, but analysts watchful

Jindal Steel & Power (JSPL) accepting a binding offer from Templar Investments for sale of its entire stake in its Oman-based steel business is a positive for the Indian steel major.

The 2.4-million tonne per annum (mtpa) capacity is being divested for an enterprise value of more than $1 billion, and will help JSPL reduce debt by 20 per cent, besides allowing the company to focus on its more profitable Indian operations.

JSPL’s net debt stood at Rs 35,919 crore ($4.8 billion) as of March 31, of which Rs 5,619 crore ($740 million) is attributed to Shadeed Iron & Steel —