Steel maker Jai Balaji Industries Ltd on Monday said it has signed a Rs 559-crore debt agreement with Tata Capital Financial Services to retire the remaining legacy non-performing assets (NPAs) held by two asset reconstruction companies.
In 2018-19, Jai Balaji had an outstanding NPA of about Rs 3,000 crore, and banks subsequently sold this debt to two ARCs.
"With the agreement with Tata Capital, we have now completely cleared the legacy NPA book held by the ARCs," Chairman & Managing Director Aditya Jajodia told PTI.
"Our current debt stands at only Rs 559 crore secured from Tata Capital. Given our positive turnaround and strong cash flow, we aim to be debt-free within the next 12 months," he said.
Retiring the debt held by the ARCs demonstrates the company’s proactive approach to strengthening its financial position and paving the way for sustained growth and success, Jajodia said.
"The agreement with the Tata Group NBFC has a three-year term, but the company intends to repay the loan within the next 12 months. Our half-year (H1) EBITDA stands at Rs 450 crore on a revenue of approximately Rs 3,000 crore," he said.
With this new debt structure, Jai Balaji Industries is now positioned to move forward with its expansion plans for ductile iron pipes and special grade ferro alloys, the company said.
It also plans to implement debottlenecking of facilities and introduce various cost-cutting measures to further optimise value addition.