Sajjan Jindal-led JSW Steel aims to turnaround Monnet Ispat & Energy within one year and merge the entity with the parent.
“We will eventually merge Monnet Ispat into JSW Steel and it will be a JSW brand. Our past experience is normally we turn-around in one year, so we hope that will happen,” chairman and managing director Sajjan Jindal told reporters on the sidelines of company’s annual general meeting held here today.
The National Company Law Tribunal last week approved sale of insolvent Monnet Ispat & Energy Ltd to a consortium of JSW Steel Ltd-AION Capital who were the sole bidders for the asset. Monnet Ispat operates two mills in Raipur and Raigarh and owed total Rs 110 billion to about 39 lenders. The acquisition of Monnet was made for Rs 28.75 billion where banks took a haircut of 75 per cent.
Monnet Ispat manufactures coal-based sponge iron and various other steel/iron-based products and has a capacity of 1.5 million tonne.
Meanwhile, the steel producer continues to have strong investment plants to grow its capacity as it aims to invest $6 billion over next three years to take its capacity to 25 million tonne. Though the company will continue to focus on India market for its capacity expansions both organic as well as inorganic, it is also making efforts to keep its overseas customers and has therefore made some relevant investments in the US and Europe.
“Since overseas, some countries have taken some protectionist measures, we have made some investments in these geographies in order to cater to our 10-15 year old customers based there,” informed Jindal.
Among other NCLT-listed assets, JSW Steel is also bidding for 10 million tonne Essar Steel plant located in Gujarat. “The matter is in the court and the NCLAT judgement is expected in the next 2-3 weeks. We will see after that what happens,” he said.
Apart from capacity expansion, JSW Steel also wants to strengthen its backward integration by making investments in coking coal and iron ore mines at the right time. “Though we will look to become fully integrated, our strength lies in converting raw material into high grade steel product,” Jindal said.
JSW Steel is among the top primary producers of steel in the country along with Tata Steel, state-owned Steel Authority of India (SAIL), and Jindal Steel & Power. JSW Steel, is the flagship company of over $13 billion JSW Group with a capacity of 18 MTPA.
Source: July 25, 2018, Business Standards