Jindal’s plans to sell stake in Oman unit is ‘premature,’ says company chief

26 December 2016

Jindal Shadeed Iron Steel Company on Wednesday said that the group’s plans to sell a minority stake in Oman unit are premature and no decision has been taken so far.

An Indian news website reported that India’s Jindal Steel and Power is likely to sell a significant stake in its Oman subsidiary – Jindal Shadeed Iron and Steel – to meet debt repayment obligations.

“The report is premature. So far, no decision has been made. There were some issues with banks, which was discussed with banks,” Naushad A Ansari, chief executive officer of Jindal Shadeed Iron and Steel told Times of Oman. “This could be an initiative from the lenders side.”

“The news report has come as a surprise for Oman operation, as we are financially quite healthy,” added Ansari.

Ansari also said that the syndicated loan, which the group took few years ago, was for the group’s operations in several countries and not just for Oman.

Jindal Steel and Power Ltd has invested more than $1.2 billion so far in Sohar unit for acquiring the Sohar facility and for expanding the integrated steel complex, which include a steel melting shop and rerolling mill. Indian steel giant Jindal had invested $464 million for acquiring the facility from an Abu Dhabi group way back in 2010. Later on, the company expanded the facility massively by commissioning a 2 million tonnes per annum steel rolling mill in Sohar to make the Sultanate’s first and largest steel complex.

Referring to the company’s proposal for an initial public offering (IPO), Ansari said that “this will be carried out at the right time.”

“We are in discussion with various experts. (However), the GCC market for steel is not good in terms of price and margin,” added the Jindal Shadeed Iron and Steel chief.

Apart from raising funds, the objective of the share offer is to offer stakes to Omani and GCC investors. The plan is to offer 25-30 per cent stake in Jindal Shadeed Iron and Steel to local investors.

Jindal Shadeed Iron and Steel has a capacity to produce 2 million tonnes of steel per annum in Sohar, which is mostly used in construction sector and special steel used for other applications including oil and gas sector. Apart from Oman, the major export markets of the company include other GCC countries and Europe.

Source – Times of Oman