India’s largest manufacturer of auto-grade steel, Bhushan Steel Limited, has reportedly decided to sell and lease back its oxygen plant.
It is understood that the sale and lease was because the company has been constantly facing cash flow stress and this will ease the liquidity for the company.
Bhushan Steel has been under pressure from its lenders to cut down its debt burden; around 51 banks have an exposure of around $6.05bn in the company.
The company posted a net loss of Rs 7.3bn ($110m approx.) for the second quarter ended 30th September 2015, compared to a net loss of Rs 2.9bn ($43m) recorded during the quarter ended 30th September 2014.
In its recent filing to the Bombay Stock Exchange (BSE), Bhushan Steel explained that, “It had entered into the arrangement to sale & Lease Back arrangements of Cock Oven Plant -I and Oxygen Plant -V of the company situated at integrated steel plant, Meramandali Orissa.”
The company also put another oxygen plant for sale and lease in February (2015) and by putting two of its oxygen plants into such a position, it aims to raise $151m during the 2015-16 fiscal year.