Naveen Jindal to exit oil & gas business, sell stakes to cut debt

NEW DELHI: Naveen Jindal plans to exit from the oil and gas business and his listed entity Jindal Steel and Power (JSPL) will sell stakes in some projects to reduce the group's debt burden. JSPL had debt of Rs 37,500 crore as of June against Rs 36,500 crore in the year earlier. However, the company plans to continue its investment drive to expand in mining besides its steel and power plants.

“We will exit from some of the projects to reduce our debt burden by end of this financial year. We will continue to focus on mine, minerals, steel, cement and power businesses.

JSPL will invest Rs 6,000 crore during the fiscal and it will be largely funded from internal cash generation,“ said JSPL managing director and CEO Ravi Uppal. He added that the group has already hired advisors to look for buyers for Jindal's investments in oil and gas blocks while JSPL is evaluating its options.

JSPL group CFO and director Rajgopal K said the company will exit from non-core activities and also core business that may not be generating adequate cash.

In a bid to diversify in 2008, the group established Jindal Petroleum that acquired seven oil and gas blocks, including five in Georgia and one each in Bolivia and India. According to Jindal Petroleum's website, the company has so far committed an investment of $200 million and is currently producing about 550 barrels a day. Last year, it announced the discovery of crude oil in one of its blocks in Georgia and a $100 million development plan for the blocks.