Prashant Jhawar - former chairman of Usha Martin and co-owner of 25.5 per cent stake in the company - who had dissented during the board meeting that approved the sale of steel business to Tata Steel, has decided to support the resolution at the forthcoming shareholders' meeting.

The shareholder's meeting was slated for November 10 where the resolution was being placed as a special business which would have required 75 per cent of the votes. The father-son's support to the deal would have been key.

In a statement, Prashant Jhawar, said, “We had earlier welcomed the possible involvement of the Tatas in the management of Usha Martin’s Steel Division resulting in value for all stakeholders”. In order to facilitate this, we have instructed our lawyers to support the resolution for the sale of the steel division of Usha Martin to the Tata Sponge Iron Ltd (TSIL), at the forthcoming shareholders' meeting. We have also conveyed our decision to the lead banker, the State Bank of India." Tata Sponge is the vehicle being used for the acquisition.

Days after the Tata Steel deal, Basant and Prashant Jhawar had raised concerns about the utilisation of funds from the sale. The agreed sale price for the deal is Rs 45.25 billion.

Prashant Jhawar on Monday said that the support to deal was being extended even though those concerns remain.

"We are doing this even though our concerns over specific utilisation of sales proceeds towards repayment of a term loan, working capital, unsecured/operating creditors and more particularly the contingent liabilities in the residual business as listed on page 65 of the annual report of UML for the year ending 31st March 2018, remain unaddressed. The contingent liabilities listed total circa Rs 8.60 billion including claims from the State Govt. of Jharkhand pertaining to irregularities in

the mining operations, allegedly carried out by the present management."

"We believe, should such claims require settlement it may result in additional debt being loaded on to the residual business. It would be in the best interest of all the stakeholders if the management and the board come out with specific plans to find a resolution. Our concern on the above, as well as, possible diversion of funds remains unaddressed," he added while welcoming the Tatas.

"We are pleased to extend a warm welcome to the reputed house of Tatas to run the Steel Division founded by my father, Basant Kumar Jhawar. We are confident that TISL will run the assets in the way they deserve to be administered and enhance the legacy. Basant Kumar Jhawar has always worked in the interest of all stakeholders and this event is not an exception, thereby supporting the resolution and acquisition of assets," Prashant Jhawar said.

The sale was aimed at deleveraging the Usha Martin balance-sheet. Usha Martin's debts were at around Rs 45 billion.

Shareholding pattern:

Basant & Prashant Jhawar: 25.5%

Brij & Rajeev Jhawar: 25.5%

Public Holding -Institutions: 9.14%

Public Holding -Non-institutions: 39.86%