Jindal brothers near $782 mn power plant deal

Billionaire Sajjan Jindal's JSW Energy is nearing a deal to buy a 1,000 megawatt coal-fired power plant from his brother's debt-laden firm, Jindal Steel and Power, for around $782 million, two sources familiar with the matter said.

A deal could be announced as soon as Wednesday, the sources said, although it could be delayed until next week as details, including the final price, were still to be settled.

Jindal Steel and Power's chief executive, Ravi Uppal, said a deal was being negotitated but declined to give more details. JSW did not immediately respond to an email seeking comment.

A deal would help reduce debt at Jindal Steel and Power, majority-owned by Sajjan Jindal's younger brother Naveen.

The company - whose net debt at the end of December stood at Rs 46,000 crore  ($7 billion), nearly eight times the company's current market capitalisation, has been in talks with lenders to reschedule repayments due to "cash flow mismatches".

The brothers once competed to buy foreign assets, but Jindal Steel is now struggling after country's top court cancelled its coalmining licences and a weak commodity market hit margins.

The power plant deal would help JSW Energy in its efforts to nearly triple its power generation capacity to around 12,000 megawatts by early in the next decade.

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