Sajjan Jindal-led JSW Infrastructure Ltd is facing difficulties in raising money to buy Chettinad Builders Pvt Ltd before the exclusivity period ends in mid-October.

The deal is facing hurdles due to uncertainties surrounding JSW’s ₹19,700-crore acquisition of Bhushan Power and Steel Ltd under the Insolvency and Bankruptcy Code (IBC). A consortium of public sector banks is understood to be “unhappy” over the developments as they were looking forward to the JSW-Bhushan Power and Steel deal to clean their books partly. “Because of this, JSW’s relation with PSU banks have soured and they are reluctant to extend further loans to JSW,” said a source close to the development.

“JSW has exclusivity on the deal till mid-October by which time, it has to arrange money. After that, the deal would be made open to other interested parties,” the source added.

The Enforcement Directorate has filed a petition in the Supreme Court seeking to stay the implementation of the resolution plan for Bhushan Steel submitted by JSW. The plan was approved by the National Company law Tribunal (NCLT) and upheld by the National Company Law Appellate Tribunal (NCLAT). But JSW wants Supreme Court’s final nod to pay the money to the banks.

Meanwhile, Chettinad Group has made Chettinad Builders transaction ready after undertaking a re-alignment of assets and de-merger of some companies. If the deal goes through, JSW will get access to three terminals – two in Kamarajar Port and one in New Mangalore Port Trust.

Twist to the deal

BusinessLine had reported in August that the acquisition is valued at about ₹800-1,000 crore. The acquisition of Krishnapatnam Port by Adani Ports and Special Economic Zone Ltd (APSEZ) has added a twist to the JSW-Chettinad deal.

“If the JSW-Chettinad deal happens, Krishnapatnam port will be the big loser because 5-6 million tonnes of cargo which are currently shipped by JSW through Krishnapatnam will shift entirely to the terminals acquired by JSW,” a port industry executive tracking the deal said.

Despite the high revenue share the three terminals are contractually mandated to pay the respective port authorities, there is pressure on JSW to buy these facilities as it does not want to handle cargo at Adani-controlled Krishnapatnam port, he added.

“JSW is under strategic pressure to have its own terminals for handling group cargo without being at the mercy of Krishnapatnam port with attendant pricing risks,” he added.

“The strategic urgency for JSW acquiring Chettinad has thus grown after Krishnapatnam was bought by Adani. If it happens, Krishnapatnam will lose revenue of at least ₹150 crore,” he said.

Stating that fund raising was an “issue”, a JSW Infrastructure official said the Chettinad deal would help it to “forego” dependence on Krishnapatnam.

“The Chettinad deal makes sense for JSW because the new rail lines planned will shorten the distance to haul the cargo from these three facilities to JSW’s steel plants,” he added.

Chettinad Group could not be reached for comments.