ACCOUNT PROFILE

JSPL approves raising $1 billion for capacity expansion

Posted on 02 September 2021

Jindal Steel and Power (JSPL) has approved raising funds of $1 billion to increase steel production capacity from the existing 8.6 million tonnes/year to 15.9m t/y in the fiscal year ending March 2024. Iron ore pellet production capacity will also rise from 9m t/y to 21m t/y.

The Indian steelmaker intends to become a net debt-free firm by 2023 versus an existing net debt of INR 13,000 crore ($1.8 billion). The steelmaker eyes reducing net debt by INR 4,000 crore by the end of 2021, mainly through repayments by internal accruals.

The company will raise the expansion funds by issuing bonds in one or more tranches to domestic or global investors, Kallanish notes. “The board has approved a potential fundraising including by way of issuance of non-convertible, senior, unsecured, fixed/LIBOR rate notes denominated in foreign currency or rupee bonds,” says JSPL in an exchange filing.

“The funds will be raised in one or more tranches – the issue – for a sum of up to $1 billion for such permissible end-uses. The permitted end usage will oblige in accordance to the applicable law; including, but not limited to the SEBI guidelines and the ECB guidelines,” the producer adds.

JSPL plans to invest more than $2.4 billion in over six years to ramp up capacity. The firm is setting up a 2.25m t/y capacity integrated unit in Andhra Pradesh (AP) to produce hot rolled coil. JSPL, through its AP unit, aims to target export markets for HRC, exploiting its proximity to Krishnapatnam port.

Source : Kallanish