JSL Stainless expects exit from CDR by September 2012

14 Jul 2011 Evaluate

JSL Stainless, the country's largest stainless steel producer, expects to come out of its corporate debt restructuring (CDR) by September 2012. This is much before the original deadline of March 2020 as the new plant in Orissa is expected to stabilise and enhance cashflows.

JSL has a total debt of about Rs 7,500 crore including about $600-700 million in overseas loans. Last year the company had got its lenders to recast debt after a global downturn curtailed its expansion plans and made repayments difficult. The CDR brought down interest cost and stretched repayment period to a maximum of 10 years for JSL.

By FY2013, the partly-operational one-million-tonne new steel capacity in Orissa will double the firm's topline boosting cashflows and profits and helping the firm exit CDR. An exit from CDR will raise the average borrowing cost for the firm to about 10-12 percent from 8 percent now and the firm plans to refinance part debt with foreign currency loans to keep the overall cost low. JSL has another facility in Haryana with 780,000 tonnes capacity.

JSL Stainless manufactures stainless steel slabs, blooms, hot rolled and cold rolled coils, 60% of which are exported worldwide. It has a stainless steel making facility at Hissar and a ferro alloy plant at Vizag. The company is in the process of setting up a stainless steel plant in Orissa.

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