Single bidder JSW Steel has received an offer of 1,200,000 crores for the downstream company, Asian Color Coated Ispat Limited, possibly under a cloud.
Kuldip Kumar Bassi, resolution professional, said that an extension had been requested in NCLT. "The goal of everyone is to maximize value, it would be good to have competition," he said. Asked whether new bids would be invited, Bassi said that if the extension was granted, it would be a decision of the CoC (Creditors Committee).
The 270-day IBRP cut-off date for Asian Color Coated will end on April 16. The maximum time limit for resolution under the IPC is 270 days. The deadline for submission of bids for Asian Color Coated was March 8th. The request is to extend the duration of the CIRP.
JSW Steel has submitted an offer of Rs.1,200 crore for Asian Color Coated Ispat including Rs. 800 crore for secured financial creditors and Rs. 400 crore for unsecured creditors. Asian Color Coated – part of the second list of non-performing assets of the Reserve Bank of India – has a debt of around Rs 4,900, with SBI having the largest exposure at Rs 1,600.
A senior JSW official said that he did not have information on the extension of the deadline for submission but that in any resolution of assets under IBC, processes had to be followed. As such, the extension if it occurs after the submission deadline of one month would be challenged on several levels, which exceeded the resolution window of 270 days.
Sources indicate that a group of financial institutions and private equity players have reported an interest in the company.
Asian Color Coated has a cold rolling mill with galvanizing lines and color coating downstream at Bawal, in Haryana. The manufacturing facilities are spread over three sites near Delhi and Mumbai. It addresses European, African, Latin American and North American markets, in addition to India.
For JSW Steel, if he manages to pocket this asset, it will be the third under IBC. JSW Steel's resolution plan for Bhushan Power & Steel is being reviewed by NCLT for approval. The duration of the CIRP for this asset also exceeded the 270 days stipulated.
In addition, AION-JSW Steel had acquired another insolvent company, Monnet Ispat & Energy. In Monnet Ispat also, AION-JSW Steel was the sole bidder.
JSW Steel adds capacity upstream. Because of this, Asian Color Coated as a downstream facility is of interest to the company. By the end of the current fiscal year, JSW would add five million tonnes to Dolvi. Capacity at Vijayanagar will also increase from 13 to 18 million tonnes.
Although JSW Steel has downstream capacity in its plants, this would not be enough for the additional upstream capacity. With Asian Color Coated, JSW already has an existing customer relationship.
JSW Steel Offers 1200 Crores of Rupees for Ispat, Asian Coated Color
Lenders and RP move NCLT for an extension
AION-JSW has already caught Monnet Ispat & Energy while the JSW project for Bhushan Power is featured in NCLT