As per media reports, Monnet Ispat is currently in discussion with Bhushan Steel to sell its entire 35% stake in Orissa Sponge Iron & Steel Ltd (OSISL). OSISL has an annual capacity of 0.25 MnT pa sponge iron and also owns an iron ore reserve in Odisha (mines operations are yet to start).
The company is taking this step in order to curtail its debt. Besides, the company has also finalized sale of its power business to JSW Steel. This deal is expected to close in Dec’15 and will provide a benefit of around INR 40 billion to Monnet.
The company’s net debt post sale of the power business stands at INR 70 billion, which will further reduce after the company sells its 35% stake to Bhushan Steel.
Alongside, Monnet is also in talks with lenders to restructure part of its debt and doesn’t foresee an immediate payments crisis.
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