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Steel sector slowdown likely to impact turnaround time for Monnet: Sajjan Jindal

Reuters MUMBAI | Updated on July 25, 2019 Published on July 25, 2019

Sajjan Jindal   -  REUTERS

Steel prices since JSW's acquisition has fallen by 30 percent

JSW Steel Ltd said a weaker steel market hit by falling global demand and a local slowdown could impact the turnaround time for its newly acquired Monnet Ispat assets, but its chairman played down any substantial impact on financials.

“It might be a little bit affected,” Sajjan Jindal, said in Mumbai on Thursday.

“We have always maintained it may take about two years to turn around and I think we will still try to do it within two years,” he said on the sidelines of his company's annual meeting.

Read also: JSW Steel commissions pellet plant at Monnet Ispat

JSW Steel, Tata Steel Ltd and mining tycoon Anil Agarwal-led Vedanta Ltd are the major companies that have acquired a clutch of loss-making steel assets in the last two years under India's new bankruptcy regime.

Global steel giant ArcelorMittal is also close to snagging the debt-ridden Essar Steel's assets for $6 billion.

These acquisitions were primarily done between May and September last year when steel demand and prices were strong.

But a trade war between the U.S. and China and a slowdown across various sectors in India had pushed steel prices down by 30 percent since last year.

Jindal, just a month before he closed the Monnet transaction in Sept. 2018, had said it would take the company a year to turn around Monnet Ispat, according to various news reports.

He said on Thursday the current slowdown in the automotive sector is a temporary one and the sector “will bounce back.”

He was also hopeful that the government’s major infrastructure push would help offset much of the fall in steel demand.

Jindal also said that he would not revise down a bid for Bhushan Power after some of its lenders this month alleged its erstwhile management team had indulged in fraudulent transactions.

Creditors to Bhushan Power had declared JSW Steel's roughly ₹20,000 crore ($2.90 billion) offer as the winning bid in February.

Published on July 25, 2019
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