JSPL gets banks' nod to recast Rs 7125 cr debt under 5/25 scheme....!

The debt had seven banks behind it with State Bank of India as the lead. Axis Bank, ICICI Bank and IDBI Bank were among the other lenders.S B I had an exposure of more than Rs. 3,000 crores, the source said Dhirendra Tripathi Jindal Steel & Power Ltd has secured the approval of its lenders to restructure Rs. 7125 crores of its 5-7-year debt into a long term debt of 20 years under the Reserve Bank of India’s 5/25 scheme, according to a source familiar with the development. “The restructuring will immediately enhance cash flow as the interest outgo every year will significantly come down,” the source told the company’s interest outgo in the first six months (April-September) of the current financial year was Rs. 1,725 crores, higher by 7% from the same period a year ago. 

The debt had seven banks behind it with State Bank of India as the lead. Axis Bank, ICICI Bank and IDBI Bank were among the other lenders. SBI had an exposure of more than Rs. 3,000 crores, the source said. Under the 5/25 scheme, lenders can restructure their debt for up to 25 years with the flexibility of refinancing every 5 years. Jindal Steel had a consolidated gross debt of around Rs. 45,000 crores at the end of March 31 this year. Hit hard by Supreme Court’s 2014 verdict cancelling coal block allocations and the downturn in steel and power sectors -- its two core businesses -- the restructuring of the debt should come as a shot in the arm for the New Delhi-headquartered company. JSPL has reported net loss for last seven straight quarters. Net loss at the Naveen Jindal-promoted company widened to Rs. 1,987 crores during April-September from Rs. 1,567 crores in the year ago period. Gross operating margins during the same period declined by 200 basis points to 20%.