India's Jindal Steel & Power Company (JSPL) is set to transfer the group's entire stake in its Oman asset, Jindal Shadeed Iron and Steel, to another promoter group firm, Templar Investments, for an enterprise value of over $1 billion, reported the Business Standard.
Jindal Shadeed owns and operates a 2 million tonnes per annum (MTPA) steel melting shop (SMS) thus making it Oman’s first and largest SMS, and also the third largest steel plant in the Middle East & Gulf Region.
The facility at Sohar, Oman is powered by an integrated and highly automated steel plant, with 1.5 MTPA HBI, 2 MTPA SMS and 1.4 MTPA Rebar Mill.
JSPL's segments majorly include iron and steel and power and its product portfolio consists of steel product mix, construction solutions, and construction material and solutions.
As per the deal, JSPL's subsidiary, Jindal Steel & Power (Mauritius) has accepted a binding offer from Templar Investments to divest its entire stake in Jindal Shadeed Iron and Steel.
Mauritius-based Templar Investments is part of the promoter group of JSPL.
The enterprise value of the deal is over $1 billion. The divestment is in line with JSPL's vision and commitment to continuously bring down its debt and deleverage its balance sheet, said the report citing a senior official.
"This sale is in-line with our vision to reduce debt and create a much healthier balance sheet for our investors and stakeholders. We firmly believe in the India growth story," remarked VR Sharma, the managing director of JSPL.
The transaction is subject to approval from shareholders of JSPL and lenders of JSIS Oman among others. JSPL expects the transaction to close in approximately a month.
Shares of JSPL tanked 5.26% to Rs 153.10, following the announcement.
On the technical front, JSPL's RSI (relative strength index) stood at 65.188. The RSI oscillates between zero and 100. Traditionally, the RSI is considered overbought when above 70 and oversold when below 30.