The resignation of company's director comes against the backdrop of brother Sajjan Jindal-led JSW Energy, which was in final stages of negotiations to buy JSPL's 1,000 MW power plant in Chattisgarh for around Rs 5,200 crore.
Naveen Jindal's brother Ratan Jindal has resigned from the board of directors of the cash-strapped Jindal Steel and Power Ltd (JSPL).
The resignation of Ratan, who is also the Chairman and Managing Director of BSE and NSE-listed Jindal Stainless, comes into effect from March 30.
"Ratan Jindal, Director, has resigned from the Board of Directors of the company with effect from March 30, 2016, due to his pre-occupation," JSPL said in a regulatory filing.
The development comes against the backdrop of brother Sajjan Jindal-led JSW Energy in final stages of negotiations with JSPL to buy the latter's 1,000 megawatts (MW) power plant in Raigarh district of Chhattisgarh for around Rs 5,200 crore. The move will help JSPL pare its debt.
For 2014-15, JSPL had a consolidated net debt of Rs 42,929 crore against a net debt of Rs 35,419 crore in 2013-14.
On the deal, JSPL said, "As per company policy we do not respond to speculations. As part of monetisation plans already advised, JSPL is looking at various options diligently to strengthen our balance sheets."
JSPL's financials were adversely impacted on account of cancellation of coal blocks as well as payment of additional levy of over Rs 3,300 crore on coal in 2014-15 and 2015-16 fiscal as a result of a Supreme Court order.
Besides, declining steel prices coupled with cheap imports impacted margins of domestic steel producers including JSPL, analysts said, adding that the sector globally has been impacted due to low demand from China and its over capacity.
The domestic industry has been impacted in terms of low sales realisation due to cheap imports affecting financial results over the last four quarters, they added.
Earlier this month, JSPL said, "In discussion with banks, we have launched 5/25 scheme, and also exploring various options with all lenders to reschedule payments considering likely short /medium term cash flow mismatches."
The steel-to-power group had then said it is trying to bring cash into the company through -- divestment of assets and strategic collaborations through joint ventures (JVs) -- that will add to its cash flows and also result in the reduction in bank borrowings.
On Thursday, at 1004 hours, the shares of JSPL was trading up 1.04% or Rs 0.60 at Rs 58.35 per scrip on the BSE.
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