NEW DELHI: Sajjan Jindal-led JSW Steel Ltd on Thursday said its plan to raise up to Rs 1,000 crore through issuance of non-convertible debentures. In a regulatory filing, the company said that the proceeds will be used to meet long-term working capital requirements, refinance existing debt, general corporate purpose and ongoing capital expenditure.
"The committee of directors of the issuer (board) … approved the allotment of 10,000 rated, secured, listed, redeemable, nonconvertible debentures (NCDs) bearing a face value of Rs 10,00,000 each …, aggregating to Rs 1000,00,00,000," the company said. The year 2019 has been the worst year for the steel sector. Most companies have landed in the soup amid large capex spend and demand falling to a new low.
Earlier, JSW Steel had announced reduction in the budgeted capital expenditure by about Rs 4,700 crore to about Rs 11,000 crore in FY20 as a measure to conserve cash in the wake of benign economic situation. "The slowdown in growth was quite visible from June primarily because of the lack of credit from the banking system and cut in government expenditure," Seshagiri Rao, joint MD, JSW Steel, had said.
Overall, steel demand in April-November period of this fiscal was 3.56 per cent and JSW Steel expects it would be in the range of five per cent in FY21. The company said it is bringing in new capacity of five million tonne in next financial year.
It is also likely to complete the purchase of debt-ridden Bhushan Steel and Power by March-end, said a person aware of the development. However, it won’t stretch the balance sheet of JSW Steel as it typically places a financially stressed company in SPV after acquisition and till it turns around.