ELECTROSTEEL STEELS

This mid-sized steel maker from Kolkata got embroiled in problems because of delay in supply of equipment and structures for its plant. The company, promoted by 61-yearold Umank Kejriwal and his brother Mayank, exports billets, wire rod and TMT bars to neighbouring countries such as Nepal and Bangladesh. As a result of the delay and shortage of funds, the company incurred significant losses, leading to erosion of net worth. Electrosteel’s parent company, Electrosteel Castings, made a profit of `165 crore on a revenue of `2,120 crore in the last financial year; it has a market value of `1,135 crore.

The lead bank, State Bank of India, or SBI, has started bankruptcy proceedings against the company in NCLT'S Kolkata bench. The bankers, who say that the promoters are cooperative, are considering giving priority to lenders who put more funds in the company so that they are paid first in case of liquidation. The company needed `1,200-1,500 crore for completion of the steel plant. Its combined capacity is 2.5 million tonnes. At present, 1.5 million tonnes is complete.

The Piramal Group had shown interest in providing additional funds but backed out. Edelweiss Group, which has an asset reconstruction company, is also looking at the option of offering a line of credit. Bankers say the money would come as promoters are cooperating with the lenders.

Efforts to contact the company did not succeed.