Res­o­lu­tion process kicks off for Mon­net

Buy­ers to sub­mit EoI by Sept 25; JSW Steel likely con­tender

Business Standard - - FRONT PAGE - ISHITA AYAN DUTT

The res­o­lu­tion process for Mon­net Is­pat and En­ergy has be­gun, with an in­vi­ta­tion of ex­pres­sions of in­ter­est from po­ten­tial in­vestors. In­vestors have time till September 25 to sub­mit ex­pres­sions of in­ter­est (EoIs) for a res­o­lu­tion plan, ac­cord­ing to the ad­ver­tise­ment put out for that pur­pose.

Mon­net has be­come the first to ini­ti­ate the process among the five steel com­pa­nies that are go­ing through in­sol­vency res­o­lu­tion un­der a di­rec­tive of the Re­serve Bank of In­dia (RBI). The other com­pa­nies are Es­sar Steel, Bhushan Steel, Bhushan Power and Steel and Elec­tros­teel Steels.

Among the likely con­tenders for Mon­net is JSW Steel, which had emerged as the sole bid­der in the last round of bid­ding when lenders had in­voked strate­gic debt re­struc­tur­ing. That deal did not go through be­cause the lenders found the hair­cut im­plicit in the of­fer too steep.

Mon­net was one of the first com­pa­nies where lenders con­verted 53 per cent of their debt into eq­uity. Be­fore the last round of bid­ding, the Sud­hir Ma­hesh­wari-led Syn­ergy Cap­i­tal Corp and pri­vate eq­uity fund Black­stone had submitted pro­pos­als to lenders. How­ever, the pro­pos­als submitted be­fore the in­sol­vency process be­gan are not rel­e­vant any­more and in­ter­ested par­ties will have to bid afresh.

Sources said JSW could face com­pe­ti­tion. Pri­vate eq­uity play­ers and strate­gic in­vestors from the steel sec­tor have been tak­ing an in­ter­est in Mon­net since the in­sol­vency process be­gan. Also, San­deep Ja­jo­dia, pro­moter of Mon­net, is likely to sub­mit a res­o­lu­tion plan backed by pri­vate eq­uity funds.

But the fi­nal bid­ding process is still some way off. The EoIs will be short­listed and the se­lected par­ties will be pro­vided fur­ther in­for­ma­tion for sub­mis­sion of their res­o­lu­tion plans. The re­quest for pro­posal will be is­sued to ap­pli­cants qual­i­fied by the res­o­lu­tion pro­fes­sional and they will be re­quired to sub­mit their res­o­lu­tion plans within stip­u­lated time­lines along with the bid bond. The win­ning bid will be se­lected from the fi­nal bids and then the fi­nal res­o­lu­tion plan will have to be submitted to the Na­tional Com­pany Law Tri­bunal (NCLT).

The process will have to be com­pleted within 180 days and un­der spe­cial cir­cum­stances an ad­di­tional 90 days can be granted.

If a time-bound res­o­lu­tion does not emerge by then, Mon­net will go into liq­ui­da­tion.

Mon­net owns a 1.5 mil­lion tonne in­te­grated steel plant along with a 0.8 mil­lion tonne sponge iron plant, a 2 mil­lion tonne pel­let plant, a 0.96 mil­lion tonne sin­ter plant and a 230 MW cap­tive power plant in Ch­hat­tis­garh.

The com­pany also owns 7.5 mil­lion tonnes coal ben­e­fi­ci­a­tion fa­cil­i­ties in Ch­hat­tis­garh and Odisha.

Mon­net’s trou­bles started when the Supreme Court deal­lo­cated 214 coal blocks in 2014. Mon­net had five coal mines and was the coun­try’s sec­ond-largest coal-based sponge iron pro­ducer. Mon­net trans­formed it­self into a steel­maker by com­mis­sion­ing a plant in Raigarh in 2013-14.

The op­er­at­ing mine close to Raigarh pro­vided the coal. That sup­ply was dis­rupted when the coal blocks were can­celled.

Ac­cord­ing to the el­i­gi­bil­ity cri­te­ria set forth, the net­worth for a pub­lic or pri­vate lim­ited com­pany, NBFC or body cor­po­rate must be ~500 crore.

In case of fi­nan­cial in­sti­tu­tions or PE in­vestors the min­i­mum as­set un­der man­age­ment must be ~2,000 crore in the im­me­di­ately pre­ced­ing com­pleted fi­nan­cial year or com­mit­ted funds avail­able for in­vest­ment or de­ploy­ment in In­dian as­sets must be ~1,000 crore or more in the im­me­di­ately com­pleted fi­nan­cial year.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.