 "The logo of JSW is seen on the company's headquarters in Mumbai. Photo: Reuters")
In an early morning announcement on Wednesday, JSW announced its plans to acquire Jindal Steel & Power's (JSPL) Chhattisgarh power plant for Rs 6,500 crore. The Naveen Jindal-promoted JSPL has been looking to sell its assets as part of monetisation plans to generate cash flows.
The Raipur unit of 1000 MW will be transferred by creation of a special purpose vehicle (SPV) Everbest Steel & Mining Holding Ltd. In a statement to BSE, JSPL said that in order to streamline cash flows of the group and create SPV for amenable monetization by way of disinvestment, the board of Jindal Power, a subsidiary of JSPL, has forced a committee of directors, called the Restructuring Committee, to explore and evaluate various restructuring options available including a scheme of arrangement.
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The sale to JSW Energy is expected to be completed before June 30, 2018 after the power plant is transferred to Everbest Steel. The company said final valuation may vary based upon achievement of power purchase agreements subject to a minimum of Rs 4,000 crore plus the value of net current assets.
The acquisition will be subject to shareholder approval besides a go-ahead from the Competition Commission of India.
The company said the transaction will fall within the purview of related party transactions under the norms laid down by the Securities and Exchange Board of India since Naveen Jindal, promoter and chairman of JSPL and Sajjan Jindal, promoter and chairman and managing director of JSW Energy are relatives. “The consideration price is supported by an independent valuation and hence is at arm’s length,” it said.
