sweating assets
Jindal Steel & Power Ltd said it didn’t pay interest due on 30 September on non-convertible debentures, a sign that cash flows are falling short of liabilities.
The New Delhi-based company, controlled by former lawmaker Naveen Jindal, listed 11 groups of securities on which it failed to make the interest payment, according to a stock exchange filing. The company didn’t cite a reason for the default.
Jindal has reported losses for the past seven quarters and endured a two-year slump in steel prices before the government started restricting imports. Its power plants have been running below capacity and have struggled to obtain long-term purchase contracts.
The company now plans to raise cash by selling assets and increase revenue from coking coal mines in Australia and Mozambique, as well as sales of steel products, chief executive officer Ravi Uppal said in an interview last month.
He declined to comment on the defaults on Wednesday when contacted by Bloomberg News.
The company has a debt of about Rs45,000 crore ($6.77 billion) and annual interest liabilities of about Rs3,000 crore, Uppal said during the September interview.
“Reducing debt is our priority number one,” he said at the time. “We are not making any more capital expenditure. We have come to a stage where we would like to sweat the assets we have built.”
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