Jindal brothers agree on power plant deal - sources | Reuters

NEW DELHI Indian billionaire Sajjan Jindal's JSW Energy Ltd has all but agreed to buy a 1,000 megawatt power plant from his brother's heavily indebted Jindal Steel and Power Ltd in a deal valued at over $900 million, two sources told Reuters.

An announcement could come as early as Wednesday, though one of the sources with direct knowledge of the matter said further talks were scheduled for Tuesday night to "discuss a few more things to conclude a deal".

JSW and Jindal Steel officials have been meeting in New Delhi and Mumbai over the past weeks. A last-minute disagreement over valuation forced JSW to cancel a scheduled news conference last week, according to one of the sources.

JSW and Jindal Steel officials did not immediately reply to requests for comment outside regular business hours on Tuesday.

A deal would help reduce debt at Jindal Steel, majority-owned by Sajjan's younger brother Naveen, and would be a boon for top lender State Bank of India (SBI) that has been trying to broker an agreement between the companies.

Indian banks are saddled with a corporate bad debt mountain of around $121 billion.

Jindal Steel - whose net debt at the end of December was 460 billion rupees ($6.91 billion), or seven times its current market valuation - had been in talks with lenders including SBI to reschedule repayments due to "cash flow mismatches".

The Jindal brothers once competed to buy foreign assets, but Jindal Steel is now struggling after India's top court cancelled its coal mining licences and a weak commodity market hit margins. (reut.rs/1ScI9QL)

Buying a coal-fired plant would help JSW in its efforts to nearly triple its power generation capacity to around 12,000 megawatts by early next decade.

Jindal Steel commissioned the first of the four 250-megawatt units at the site in the Raigarh district of Chhattisgarh in eastern India in 2007, becoming the first private company to set up an independent power plant.

($1 = 66.5340 Indian rupees)

(Reporting by Krishna N. Das; Editing by Alexandra Hudson)

This story has not been edited by Firstpost staff and is generated by auto-feed.


Published Date: May 03, 2016 11:45 pm | Updated Date: May 03, 2016 11:45 pm



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