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Free from CDR process now, Jindal Stainless eyes easier access to capital

Twesh Mishra New Delhi | Updated on July 22, 2019 Published on July 22, 2019

Jindal Stainless expects its corporate debt restructuring (CDR) process to conclude before the end of this calendar year.

“There are a lot of indirect benefits of exiting the CDR from an investor’s point of view or from the consolidation point of view. We are reducing debt every year. We are deleveraging the company further. We are not expanding too much and growing with the market pace. And the CDR overhang will completely go,” Managing Director at Jindal Stainless (JSL), Abhyuday Jindal told BusinessLine.

In a regulatory filing, Jindal Stainless said that the consortium of CDR lenders had agreed to allow CDR exit for the company with effect from March 31, 2019.

“The lenders have approved the exit and now the process is on the documentation and approvals front. The decision and conditions in terms of recompense have been agreed upon,” Anurag Mantri, Group Chief Financial Officer of Jindal Stainless said.

“The effective date for CDR exit was financial year 2019. But we will be completing the process in the next three to four months time. It’s more a process as the policy level agreement has been reached with the lenders,” Mantri added.

₹5,500-crore debt

Mantri said that between the two companies, Jindal Stainless and Jindal Stainless (Hisar), the group has close to ₹5,500 crore debt. The working capital debt is ₹700-800 crore.

“We are reducing the debt continuously so that CDR exit per se will not reduce any debt. But if you see our leverage story our debt-to-equity ratio used to be more than 6:1 in 2015, which as on date stands at 1.7:1. And as our focus continues to keep deleveraging, we have been repaying almost ₹800 crore at the group level between Jindal Stainless and Jindal Stainless (Hisar),” Mantri said.

“Post CDR, we will have access to much larger lenders because right now our accessibility to lenders is restricted. There are RBI guidelines because of which new lenders cannot come in. With the exit, we will be able to tap the market. Immediately it will open avenues for new lenders. In terms of the new structure, I think, it will require some more cooling period before we actually go and approach the international and other markets,” Mantri added.

Jindal Stainless is also eyeing an annual revenue of over ₹3,400 crore in the next two years. The current annual revenue of the company is close to ₹2,300 crore.

Published on July 22, 2019
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