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JSPL to launch transparent competitive bidding process for JPL divestment; stock up 4%

JSPL to launch transparent competitive bidding process for JPL divestment; stock up 4%

Earlier in April, JSPL said that it had accepted a binding offer from Worldone to divest its 96.42 per cent stake in JPL in an all-cash deal of Rs 3,015 crore

JSPL to launch transparent competitive bidding process for JPL divestment; stock up 4% JSPL to launch transparent competitive bidding process for JPL divestment; stock up 4%

Shares of Jindal Steel and Power Ltd (JSPL) rose 10 per cent to hit an intraday high of Rs 437.50 on BSE a day after the company launched an additional transparent competitive bidding process for the proposed stake sale of Jindal Power Ltd (JPL).

"After various rounds of discussions and negotiations, JSPL and its transaction advisors have successfully negotiated a revised and improved binding offer (“Revised Offer”) from Worldone accommodating all of the investor feedback received by the company," JSPL said.

The stock opened 10 per cent higher at Rs 437.50 against the previous close of Rs 397.75 on BSE. It has gained 145 per cent in the last one year and risen 54 per cent since the beginning of this year.

With a market capitalisation of Rs 41,937 crore, the share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages.

Under the revised offer, Worldone will buy out all equity shares and redeemable preference shares of JPL held by JSPL for a total consideration of approximately Rs 7,401 crore, of which Rs 3,015 crore will be payable by cash.

The balance Rs 4,386 crore will be payable by way of assumption and takeover of liabilities and obligations of JSPL in relation to inter-corporate deposits and the capital advances extended by JPL to JSPL.

"In effect, the revised offer is now simple and straight forward where there will be no continuing financial linkage between JSPL and JPL post the divestment. This was one of the key asks by JSPL investors during the feedback sessions held earlier and has been addressed comprehensively," the company said.

“JSPL has been able to successfully negotiate an improved revised offer accommodating all of the investor feedback received over the last several weeks. In addition, JSPL has also announced to undertake an additional transparent competitive bidding process open to the World at large
(domestic & international) to see if the company can secure an even higher value than the present revised offer given by Worldone," it added.

Earlier in April, JSPL said that it had accepted a binding offer from Worldone to divest its 96.42 per cent stake in JPL in an all-cash deal of Rs 3,015 crore. The sale of stake in JSPL's material subsidiary also included 3,400 MW coal-fired power plants in Chhattisgarh and other non-core assets owned by JPL.

JSPL had said that the divestment was in line with its strategic objective to continuously reduce debt, focus on India's steel business and significantly reduce its carbon footprint by almost half as part of its ESG objectives.