Indian conglomerate Jindal Steel and Power Limited (JSPL) is weighing a strategic stake sale in its wholly-owned integrated steel complex, Jindal Shadeed Iron & Steel (JSIS), located within Sohar Port on the Sultanate’s Sea of Oman coast.
The announcement came in an interview by a top JSPL boss to a leading Indian newspaper on Tuesday.
JSPL Chairman Naveen Jindal was quoted by The Economic Times as saying that the group is mulling plans to offload part of its stake in the Oman steelmaker to a strategic investor – part of a wider effort by the Indian business house to reduce its substantial debt pile.
Significantly, a proposed stake sale effectively marks a departure from the group’s earlier move to offer part of its equity for public investment via an Initial Public Offering (IPO).
“For a long time, JSPL explored the option of an IPO to encash a part of its Oman operations. But it has dropped the IPO plan and may go for stake sale,” Naveen Jindal told the business daily this week.
The revelation comes against a backdrop of “record-breaking” achievements at the group’s Oman subsidiary. Last month, Jindal Shadeed announced that it had wrapped a banner fiscal year in terms of its operational performance. The company’s financial year runs from April 1 to March 31.
“We are happy to report that 2019-20 was a record-breaking year when it came to our production units,” said Jindal Shadeed in a series of tweets. “All three of our production units performed at their highest ever annual capacities -- better than their nameplate production capacities for the month of March 2020,” it noted.
The Direct Reduction Iron (DRI) plant, which is the centerpiece of the Sohar complex, achieved its “highest annual production” of 1.775 million tons per annum (MTPA) in 2019-20, surpassing its previous best of 1.547 MTPA achieved during the previous fiscal year, the company said. This compares with a nameplate capacity of 1.5 MTPA, attesting to its superior operational performance during the year.
Likewise, the Steel Melting Shop (SMS) recorded its “highest annual production” of 1.87 million tons in 2019-20, surpassing its previous high of 1.71 million tons in 2018-19, the company said. Featuring a pair of Electric Arc and Ladle Refining furnaces, the Steel Melt Shop produces square and round billets or blooms for steel mills and downstream processing plants.
Commencing operations in 2011 with an investment of around $1.1 billion, Jindal Shadeed Iron & Steel LLC (JSIS) is a wholly owned subsidiary of the $18 billion Indian-based O P Jindal Group, which has interests in steel production, power generation, mining and infrastructure.
Oman Observer is now on the WhatsApp channel. Click here
