JSW, JFE in JV for BPSL unit

JSW STEEL HAS entered into a 50:50 joint venture with Japan’s JFE Steel Corporation, restructuring the ownership of Bhushan Power and Steel (BPSL) and creating a separate platform for its future expansion.

- URVI MALVANIA

As part of the transaction, the BPSL steel business will be transferred to JSW Sambalpur Steel through a slump sale valued at ₹24,483 crore. JSW Sambalpur is wholly owned by JSW Kalinga Steel, which will become the actual joint venture vehicle. JFE will acquire a 50% stake in JSW Kalinga for ₹15,750 crore, invested in two equal tranches, resulting in joint control of the asset once all transactions are completed.

JSW Steel management said the deal would reduce its consolidated net debt by ₹37,250 crore by June 2026.

This will be achieved through three components: the slump sale proceeds of ₹24,483 crore (which include the first tranche of JFE’s investment); the transfer of approximately ₹4,900 crore of existing BPSL debt into the joint venture structure and the receipt of ₹7,875 crore from JFE’s second-tranche equity infusion.

SWAYAM SAURABH, CHIEF financial officer, JSW Steel said with the reduction in debt, which stands at around ₹80,000 currently, the company's net debt to Ebitda ratio will also decline in the coming quarters.