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Kallanish Kallanish

Knowledge matters Knowledge matters

August, 5th 2020

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JUL 01

JSPL sells Shadeed stake to reduce debt


Jindal Steel & Power (JSPL) will sell its entire stake in Oman-based long steelmaker subsidiary Jindal Shadeed to Templar Investments Limited for $1 billion, Kallanish learns from the Indian producer.

The Indian steelmaker has accepted a binding offer from the Mauritius-based investment firm, which is part of the same OP Jindal Group that owns JSPL.

“The divestment is in line with JSPL’s vision and commitment to continuously bring down its debt and deleverage its balance sheet,” JSPL says. The sales process “…received competitive offers from multiple interested bidders.”

The transaction is subject to approval from JSPL's shareholders and Jindal Shadeed's lenders among others. JSPL expects the transaction to close in approximately a month.

JSPL said in May it is seeking a strategic investor for Shadeed rather than carrying out its earlier-planned initial public offering for the unit (see Kallanish passim). Later that month it said the non-availability of migrant labour as a result of the Covid-19 pandemic has hastened the lower-oil-price-driven decline in Middle Eastern construction activity.

In the fiscal year through March 2020 Shadeed’s sales rose 4% on-year to 1.88 million tonnes and output by 9% to 1.87mt. Revenue and Ebitda, however, fell -11% and -24% respectively on-year to $910m and $138m.

Sohar-based Jindal Shadeed’s 2.4m t/year capacity EAF meltshop feeds both square and round billet casters. The works also has a 1.8m t/y hot-briquetted iron plant and a 1.4m t/y rebar mill. Last year Shadeed commissioned a new SMS-supplied high-speed billet caster with six strands and plans to install further equipment in order to enable the production of SBQ steel grades.