India’s Jindal Steel and Power Ltd (JSPL) has decided to sell its entire stake in its Oman-based asset Jindal Shadeed Iron and Steel (JSIS Oman).
The company has recently accepted a binding offer from a promoter company Templar Investment Ltd. The value of the agreement is $1 billion, the company’s officials say. The deal is subject to shareholders’ and lenders’ approval, while JSPL expects all to be finalized in around one month. “This sale is in line with our vision to reduce debt and create a much healthier balance sheet for our investors and stakeholders. We firmly believe in the India growth story," said V.R. Sharma, managing director of JSPL. The sale of JSIS is expected to reduce the overall debt of JSPL group by around INR 60-70 billion, media sources report.
Jindal Shadeed is the largest steel producer in Oman and of the few integrated facilities in the Gulf Cooperation Council (GCC) region. The company takes a large share of the local market and has been actively selling its rebar to the UAE. In addition, Jundal Shadeed has been active in selling billet to China and Southeast Asia, benefitting from a buying spree. It is worth mentioning that local market players do not expect any significant disruptions in the company’s operations despite its sale. “Templar is an investment company owned by the four Jindal brothers. So this is done for some other purposes,” a trader said.
JSIS Oman, spread across 120 hectares in the port city of Sohar, has a direct reduced iron plant, a steel melt shop and a rolling mill, primarily producing steel billets and rebars. In the fiscal year 2019-20, JSIS Oman reported a production of 1.87 million mt and sales of 1.88 million mt, with revenue and EBIDTA at $910 million and $138 million respectively.