Shares of sponge iron and steel maker Monnet Ispat & Energy are locked in 20% upper circuit and now stand frozen at Rs. 42.90 on NSE with current market cap of Rs. 281 crore. While 5.7 lakh shares have been traded on BSE and NSE combined, there are outstanding buyers for 3.22 lakh shares on NSE at Rs. 42.90 per share.

Company has signed a non-binding MOU with JSW Energy for entering into discussion and due diligence for possible sale of a majority and controlling stake in one of its subsidiaries - Monnet Power Company – which is developing 1050 MW coal fired thermal power plant in Orissa.

While contract value and other details are yet to be finalized or infact even been negotiated at this stage, this MOU leaves a formal platform open for a possibility of stake sale. While financial terms of the deal are not disclosed, industry estimates peg the deal value at around Rs 7,000 crore, which will help Monnet reduce its debts of Rs. 10,800 crore, as of 31-3-15.

Meanwhile shares of JSW Energy are trading marginally in the red, down 1.2% at Rs. 98.