July 25, 2019 / 1:14 PM / 3 months ago

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

MUMBAI (Reuters) - India’s JSW Steel Ltd 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.

The logo of JSW is seen on the company's headquarters in Mumbai, India, February 11, 2016. REUTERS/Danish Siddiqui/File Photo

“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 and mining tycoon Anil Agarwal-led Vedanta Ltd 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.

Global steel giant ArcelorMittal is also close to snagging the debt-ridden Essar Steel’s assets for $6 billion.

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.

Creditors to Bhushan Power had declared JSW Steel’s roughly 200 billion rupees ($2.90 billion) offer as the winning bid in February.

Reporting by Promit Mukherjee; Editing by Keith Weir

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