Jindal Steel & Power confirmed on Thursday that its lenders have allowed refinance of and extension of timeframe for the company’s outstanding borrowings.

Naveen Jindal-led JSPL in a communication to the stock exchanges said, “In discussion with banks, we have launched 5/25 scheme, and also exploring various options with all lenders to reschedule payments considering likely short / medium term cash flow mismatches. When these are completed, there will not be any overdue situation.”

The 5/25 scheme, authorised by RBI, that allows banks “flexible structuring of long term project loans to infrastructure and core industries”.

JSPL said it “met all its financial commitments till November-December 2015.” However, currently it was facing cash flow problems.

It further said that its investments in enhancing steel capacities at Angul in Odisha and power project at Tamnar in Chhattisgarh were complete and the projects were now operational.

“With these additional capacities and better outlook for steel demand / fair sales price realisation and better outlook for power demand / reali"sation, JSPL will be in a better position to generate higher cash flows as compared to last 4 quarters, it said.

It stated, “Our efforts in bringing cash into company through divestment of assets and strategic collaborations through JVs as previously advised will add to our cash flows, and also result in reduction in bank borrowings”.

The company hoped to be in a “much stronger position to meet all its liabilities and emerge as financially strong and sustainable company in 2016-17”.