Jindal Stainless Ltd (JSL), India’s major stainless steel producer, has secured INR 600 crore (around EUR 67.7M) in so-called priority funding from L&T Finance Ltd.
Priority funding allows a new lender to come in on the promise that it will be accorded higher priority during the payout phase, once a turnaround is effected or the firm is liquidated.
In such transactions, existing lenders may cede charge on the assets in favour of a new lender, which has the first right on the company’s cash flows.
The funds will be used towards working capital needs and for capacity expansion.
JSL, which has been in financial distress for the past few years returned to profitability in Q3 FY17, posting a net profit of INR 40.43 crore from an INR 134 crore loss a year earlier.
In the quarter, JSL posted a net profit of INR 41.50 crore on a total income of INR 2,203.86 crore. It reported a total income of INR 2,157.08 crore during the June quarter of the preceding fiscal.
