Sajjan Jindal is understood to be close to striking a deal with younger brother Naveen Jindal, wherein JSW Energy will buy a 1,000 MW power plant in Chattisgarh’s Raigarh district currently owned by Jindal Power Ltd, a subsidiary of the debt laden Jindal Steel and Power Ltd.
While the two companies did not comment on speculation, market observers and analysts say that the boards of JSW Energy and Jindal Power are expected to meet as early as Sunday, March 27.
As on 4.40 p.m. IST on Saturday, JSW Energy did not inform the stock exchanges of any board meeting.
Analysts peg the deal to be worth anywhere between Rs 5,000 crore to Rs 6,000 crore.
The sale is expected to help JSPL meet its interest repayment obligations. The Naveen Jindal promoted company has made a loss in the previous five quarters. Its consolidated debt stood at Rs 42,534 crore as on September 30, 2015.
If the deal goes through, it would help increase JSW Energy’s generation capacity to 5,531 MW from the current 4,531 MW.
The company has an objective of achieving 12,000 MW generation capacity by 2025. In order to achieve that objective, JSW Energy has opted for inorganic growth through acquisitions for now.
The Jindal Power deal would be the third such acquisition agreement in the fiscal 2015-16. In July 2015, it a signed a non-biding agreement to buy a 1,050 MW power plant of Monnet Ispat & Energy Ltd. The deal is yet to be concluded.
In September 2015, JSW Energy completed the purchase of two hydroelectricity projects of Jaiprakash Ventures Ltd for Rs 9,275 crore.