ICRA downgrades Rs 4360 crore loan facilities of Jayaswal Neco to junk

MUMBAI: Jayaswal Neco Industries, a mining and steel company, has defaulted on its Rs. 4,360 crores of loans to banks triggering a rating down grade to junk, puffing up the bad loans of a banking system that is already reeling under the weight of bad loans.

Prior to the downgrade to D which indicates default grade, in the company was rated as investment grade or BBB-. In a statement to media, the rating agency said that the downgrade is ‘on account of delays in servicing debt obligations. The ratings continue to remain suspended.’

“ICRA has assigned D ratings to the Rs. 3355.25 crore long term loans, Rs. 580.0 crore fund based facilities and the Rs. 425.0 crore, short term non-fund based bank facilities of Jayaswal Neco Industries Limited.

The company incorporated in 1972, began operations with foundry units at Nagpur and subsequently integrated backward by setting up a pig iron (with captive power) manufacturing unit at Raipur in 1995.

It currently operates a 0.75 Mtpa pig iron unit, 0.2 Mtpa coke oven plant, 0.8 Mtpa sinter plant, 0.255 Mtpa sponge iron unit, 0.3 Mtpa billet making unit, 0.40 Mtpa rolling mills, 54.5 MW captive thermal/waste heat recovery based power plants. The company has been allocated couple of iron ore mines which are at various stages of development. JNIL also has an iron and steel castings capacity of 0.2 million tonnes, with its facilities located in Nagpur, Bhilai and Anjora.