Monnet Ispat & Energy rebounds from 3-month lows on plans to take measures to cut down on debt payments
Monnet Ispat & Energy, a steel maker, rebounded from 3-month lows on news that the company may sell off stakes in units in a bid to cut down on debt payments.
Monnet said it was in talks with larger rival Bhushan Steel to exit its 35 percent stake in Orissa Sponge Iron & Steel Ltd., which owns ore mines in Odisha. Additionally, Monnet was negotiating the sale of its power division with JSW Steel, which will help it cut 4,000 crore rupees liability from its balance sheet.
Debt-laden Monnet will still have 7,000 crore rupees of loans on its balance sheet after the proposed sale of its power division.
Monnet rose 2.35 rupees, or 7.5 percent, to 33.60 rupees on the National Stock Exchange where 4.1 lakh shares were traded compared with the 5-day average of 1.51 lakh shares
Monnet has seen its market capitalisation plunge 71 percent to 201 crore rupees in the past one year as investors exited the steel sector globally owing to a sharp fall in demand. Lower sales have made servicing debt difficult for steel companies of all sizes, prompting them to push for asset sales.