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Jindal Stainless allowed to exit CDR; posts 72% fall in Q4 profit


Date: 21-05-2019
Subject: Jindal Stainless allowed to exit CDR; posts 72% fall in Q4 profit
Mumbai: A consortium of banks lending to stainless steel maker Jindal Stainless have agreed for the company to exit the corporate debt restructuring (CDR) process effective from March 31, 2019, the company announced on Monday. 

The company is now required to pay the banks Rs 191 crore as "liability of recompense" and it has already provisioned for Rs 57 crore in the quarter ending March 31, 2019 as against Rs 27 crore in the December quarter last year. To be sure, the final exit is conditional upon approvals from authorities. 

CDR is a way by which banks can recover some debt from a company that is not able to pay the amount in full. 

Jindal Stainles reported a 72% fall in net profit for the quarter ending March 31, 2019 at Rs 32 crore while net sales increased by 2.5% at Rs 3,251.3 crore. Ebitda stood at Rs 302 crore. 

“CDR exit will give us more opportunities to consolidate our financial and leadership position," said Abhyuday Jindal, MD at Jindal Stainless. 

However, unhindered imports of finished goods from countries under a free trade agreement (FTA) with India continue to plague the stainless steel industry. 

"While imports of finished goods from FTA countries are duty-free, Indian producers have to pay a 2.5% import duty on stainless steel scrap and ferro-nickel, the two most important raw materials, both of which are unavailable in the country. Further, in the absence of an effective safeguard duty structure, all trade remedial measures imposed by the Government are being circumvented through dumped, subsidized, or re-routed imports. We need active government support to bring alive the Make in India vision and create more jobs for the domestic economy," Jindal said. 

Source: economictimes.indiatimes.com