Naveen Jindals Jindal Steel and Power Limited (JSPL) has put off the sale of its power subsidiary to a promoter group company following concerns expressed by the investors.
“However, a few investors have requested the company to examine and simplify certain terms around the proposed sale, before requiring them to consider the resolutions in relation to the proposed sale. In view of the above and given the unprecedented situation of Covid-19, the company would require additional time to engage with the concerned parties for evaluating the same,” JSPL said in a regulatory filing last week.
The company also postponed the Extraordinary General Meeting scheduled to be held on May 24.
“In this regard, we wish to inform you that after engaging with several investors with respect to the proposed sale of Jindal Power Limited (JPL) as stated in the notice, the company has received positive feedback from a large number of investors on the proposed sale and the comprehensive sale process run by the company through an independent third-party advisor.
“Most of the investors are aligned on the reduction in carbon footprint and improvement in ESG matrices, which this transaction can achieve for the company. They have also appreciated the cash consideration from the proposed sale and the company’s continued focus on debt reduction over the past few years,” it added.
Therefore, it is constrained to postpone the EGM to a further date, which will be intimated by the company separately, along with the revised dates of e-voting facility, it said.
In April, the JSPL board had approved the divestment of its entire equity interest representing 96.42 per cent of the issued and paid up capital in Jindal Power Limited, a material subsidiary of the company, by way of sale of shares to Worldone Private Limited, a promoter group company and a related party to the company. The equity value is an all-cash offer of Rs 3,015 crore.
The acquirer was selected by way of an elaborate bidding process run by an independent third-party merchant banker, Grant Thornton Advisory Pvt. Ltd., wherein the acquirer submitted the highest binding bid on acceptable terms and condition, JSPL said.