InvestorQ : Why has the Jindal Steel and Power deal to sell its power business run into trouble with the regulators?
Dilmini Mercia made post

Why has the Jindal Steel and Power deal to sell its power business run into trouble with the regulators?

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Dawn Cherian answered.
3 months ago
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Let me tell you at the outset that the JSPL deal has not run into any regulatory problem but it is just some issues raised by the proxy advisors over shareholder interest. We will come back to that point later. Jindal Steel and Power is likely to conclude the deal to sell 96.42% stake in its Jindal Power for Rs.7,401 crore by the last quarter of the current calendar year. The purchaser will be WorldOne, which is a company owned by the promoter group.

The ownership structure of WorldOne is one of the reasons the deal has seen objections from Proxy Advisors. They had red-flagged the deal as the unit was being sold to a promoter-owned company, where valuations may not be at arm’s length. However, 97% of shareholders have approved the deal. Out of Rs.7,401 crore, Rs.3,015 crore will be paid in cash and balance Rs.4,386 crore will be assumption of ICD obligations of JSPL.

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