Businessman Sajjan Jindal's Jindal Steel Works Energy (JSW) Ltd has decided to buy a 1,000 megawatt power plant from is younger brother's Jindal Steel and Power Ltd (JSPL) in a $976 million deal.
The deal is expected to be completed by mid-2018 to help JSW gain a stronghold in coal-rich central India through the acquisition of the power plant in Chhattisgarh.
The Naveen Jindal-owned firm will get over Rs 6,500 crore from Mumbai-based JSW if all conditions are met. JSW is expected to extend Rs 500 crore as advance with no interest.
"The adverse operating environment within the power sector in the country is driving distress sales in the sector, and JSW Energy's robust financial health coupled with a strong balance sheet is providing the company an opportunity to acquire quality power assets at reasonable valuations...," a Reuters report quoting JSW, said.
The JSPL is under the net-debt of Rs 46,000 crore - almost seven times of its current market valuation.