The National Company Law Tribunal (NCLT), Chennai has allowed conduct of a fresh auction for sale of SBQ Steels, which is under liquidation, after bidders in the previous auction said they are not keen due to the COVID-19 crisis, the economic stress and the market conditions.
In 2017, the insolvency proceedings were admitted against the company in a case filed by Union Bank of India, one of its lenders. In 2019, NCLT had ordered liquidation of the company, since no revival plan was approved by committee of lenders.
SBQ Steels, flagship of Chennai-based RKKR Group, had admitted claims of about ₹4,266.67 crore from secured financial creditors including Edelweiss Asset Reconstruction Company Limited, Bank of Baroda and Union Bank of India, according to its website. The admitted claims of unsecured financial creditors was about ₹80.24 crore. It also has claims from vendors and other stakeholders.
The company has an integrated steel plant in Nellore, Andhra Pradesh district.
Ashish Arjunkumar Rathi, who has been appointed as liquidator, had so far called for three e-auctions for sale.
In his petition, he said that the bidders in the third auction were not keen as market conditions have changed.
Third e-auction
NCLT cancelled the third e-auction and allowed the liquidator to call for a fresh auction.
The liquidator has said that the fresh auction would be held on July 21. Also the reserve price for the auction is fixed at ₹218.70 crore, 10% lower than ₹243 crore fixed in the third auction.