India: JSPL revises disinvestment plan for arm after investor feedback

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Domestic metals and mining company Jindal Steel and Power Ltd (JSPL) has revised the disinvestment plan of the company’s subsidiary Jindal Power Ltd (JPL). The company has also offered a revision from Worldone (a promoter entity). In a statement, the company said that the decision to revise the offer was taken after taking into consideration all of the investor feedback received by the company post its initial offer in May, which had drawn flak from a section of investors who cited low valuation of the deal and related party nature of the transaction as contentious issues.

According to the revised offer, the company said that Worldone will buy out all the equity shares and redeemable preference shares of JPL (held by JSPL) for a total consideration of approximately ₹7,401 crore of which ₹3,015 crore will be payable by cash, and the balance ₹4,386 crore (approximately) will be by way of assumption and takeover of liabilities and obligations of JSPL in relation to inter-corporate deposits and the capital advances extended by JPL to JSPL.

JSPL maintained the Revised Offer is now simple and straightforward where there will be no continuing financial linkage between JSPL and JPL post the divestment. This was one of the key demands by JSPL investors during the feedback sessions held earlier and has been addressed comprehensively.

Simultaneously, JSPL said that it will undertake a competitive bidding process to realize the highest value possible from the JPL stake sale, using the revised offer of ₹7,401 crore as the base offer. The bidding process will be advertised in the public domain and will present an equal opportunity for interested bidders from around the World to come forward and improve, or better the present Revised Offer of ₹7,401 crore.

“JSPL has been able to successfully negotiate an improved Revised Offer accommodating all of the investor feedback received over the last several weeks. In addition, JSPL has also announced to undertake an additional transparent competitive bidding process open to the World at large(domestic & international) to see if the Company can secure an even higher value than the present Revised Offer given by Worldone. JSPL is fully committed to its primary goal of value maximization from the JPL divestment and protecting the interests of all its stakeholders, including its minority shareholders.” said JSPL management.

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