Jindal Stainless shares down 61% on demerger of three arms

JSL shares crashed 61 percent intraday Thursday on demerger of its three wholly owned subsidiaries - Jindal Stainless (Hisar), Jindal United Steel and Jindal Coke.

The company said scheme of arrangement has become effective for Jindal Stainless (Hisar) but for other two subsidiaries, it will become effective upon receipt of approval from Orissa Industrial and Infrastructure Development Corporation. While explaining reason for demerger, it said the objective and rationale behind demerger is to increase profitability, reduction of debt, increase capacity utilisation, enable backward integration of Odisha plant etc.

JSL will transfer its coke oven plant at Odisha to Jindal Coke through slump sale for a consideration of Rs 492.6 crore. Jindal Coke will pay Rs 375 crore in cash and balance will be adjusted by issuing shares to JSL. JSL said equity shares to be issued by Jindal Stainless (Hisar) to shareholders of JSL will be listed on BSE and NSE. For the half year ended September 2015, JSL reported a loss of Rs 388.6 crore on revenue of Rs 3,276.05 crore and Jindal Stainless (Hisar) posted profit of Rs 4.04 crore on revenue of Rs 3,459.38 crore.

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