India’s leading steelmaker Jindal Steel and Power Limited (JSPL) is set to exit its power business to halve its carbon emission and debt. JSPL’s board has approved the highest bid of Rs30.15bn ($404mn) placed by Worldone to divest its 96.42pc stake in subsidiary Jindal Power Limited (JPL) in an all-cash transactions.
This development comes in line with JSPL’s strategic objective to continuously reduce its debt and amplify its focus on the steel business. The divestment includes 3,400MW coal-fired power plants in Chhattisgarh, which will significantly cut the company’s carbon footprints. The deal also includes some non-core assets of JPL.
Under its ‘Environmental, social and corporate governance, ESG objectives, the board of the company expects to reduce carbon footprint by almost half or above 50pc. The company aims to scale up in the world’s top 10 lowest carbon dioxide emitting steel companies.
The sale also reduces JSPL’s debt substantially. In December 2020, JSPL’s gross debt was Rs281.5bn, which included Rs65.32bn of Jindal Power. The company plans to focus on doubling its annual steelmaking capacity at Angul to 12mn mt from 6mn mt.