India's JSW says steel sector slowdown could impact turnaround time for Monnet

JSW Ispat Special Products

25/07/2019 14:02

* JSW Co chairman says could turn around Monnet in two years
    * JSW bought Monnet Ispat in Sept when steel prices were
high
    * Steel prices since JSW's acquisition has fallen by 30%

    By Promit Mukherjee
    MUMBAI, July 25 (Reuters) - India's JSW Steel Ltd  JSTL.NS 
said a weaker steel market hit by falling global demand and a
local slowdown could impact the turnaround time for its newly
acquired Monnet Ispat assets, but its chairman played down any
substantial impact on financials.
    "It might be a little bit affected," Sajjan Jindal, co-chair
of India's biggest steel company by local capacity, said in
Mumbai on Thursday.
    "We have always maintained it may take about two years to
turn around and I think we will still try to do it within two
years," he said on the sidelines of his company's annual
meeting.
    JSW Steel, Tata Steel Ltd  TISC.NS  and mining tycoon Anil
Agarwal-led Vedanta Ltd  VDAN.NS  are the major companies that
have acquired a clutch of loss-making steel assets in the last
two years under India's new bankruptcy regime.
 urn:newsml:reuters.com:*:nL3N1SP49M urn:newsml:reuters.com:*:nFWN1V11C8 
    Global steel giant ArcelorMittal  MT.AS  is also close to
snagging the debt-ridden Essar Steel's assets for $6 billion.
 urn:newsml:reuters.com:*:nL4N2452G3 urn:newsml:reuters.com:*:nL3N21U1XN
    These acquisitions were primarily done between May and
September last year when steel demand and prices were strong. 
    But a trade war between the U.S. and China and a slowdown
across various sectors in India has pushed steel prices down by
30% since last year.
    Jindal, just a month before he closed the Monnet transaction
in Sept. 2018, had said it would take the company a year to turn
around Monnet Ispat, according to multiple news reports.
    He said on Thursday the current slowdown in the automotive
sector is a temporary one and the sector "will bounce back."
    He was also hopeful that Prime Minister Narendra Modi's
major infrastructure push would help offset much of the fall in
steel demand. 
    Jindal also said that he would not revise down a bid for
Bhushan Power after some of its lenders this month alleged its
erstwhile management team had indulged in fraudulent
transactions.  urn:newsml:reuters.com:*:nL4N24I31J
    Creditors to Bhushan Power had declared JSW Steel's roughly
200 billion rupees ($2.90 billion) offer as the winning bid in
February.  urn:newsml:reuters.com:*:nL3N1ZZ3E8 
    

 (Reporting by Promit Mukherjee
Editing by Keith Weir)
 ((promit.mukherjee@thomsonreuters.com; +91-22-6180-7516;
Reuters Messaging:
promit.mukherjee.thomsonreuters.com@reuters.net))