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Jindal Strips to hive off subsidiaries into separate companies
January 02, 2003 16:44 IST
In a restructuring mould, O P Jindal group company, Jindal Strips Ltd is planning to hive off its subsidiaries Jindal Holdings, Jindal steel and Alloy and Jindal Stainless (Mauritius) as separate companies.
JSL which has hired global consultants Ernst & Young and law firm Amarchand and Mangaldas and Shroff A Shroff & Co to carry out the restructuring will consider the demerger issue at its next board meeting likely to be held by end of this month, company sources said on Thursday.
Sources said the objective of restructuring is to position JSL as a focussed steel manufacturing entity and delineate from all investment activities and create a balanced capital structure for getting better refinancing rated for its high-cost debt.
Stating that a large part (Rs 229 crore or Rs 2.29 billion) of JSL's net worth of about Rs 475 crore (Rs 4.75 billion) as on March 31, 2002 was invested in these subsidiaries, sources said this move will enhance JSL's financial muscle making it easier for it to get better refinancing deals on a higher net worth.
Earlier, JSL had also demerged its subsidiary Brahmaputra Capital and Financial Services.
JSL is also likely to finalise a buyer for its majority stake in US cold rolling joint venture, Massilon Stainless Inc by the end of this month, sources said.
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