Yet another legal battle over India’s bankruptcy laws is brewing with the resolution professional of Asian Colours Coated Ispat Ltd (ACCIL) rejecting a fresh expression of interest for the company after JSW Steel failed to pay for the company after winning the race last June.
The new bidder, Interups Inc of the US plans to move the National Company Law Tribunal to force the resolution professional and the company’s lenders to consider its offer. ACCIL had defaulted to Rs 5,000 crore bank loans and JSW Steel had made an offer of Rs 1,550 crore for the company which was approved by the lenders.
The NCLT has not approved the resolution plan submitted by JSW Coated yet and it remains subject to the outcome of several litigation and the insolvency process of ACCIL has not yet been completed as per the provisions of the IBC.
A source in Interups said the as one of the key objectives of the IBC and later reiterated by the Supreme Court is the maximisation of the value of the assets of the corporate debtor, its offer should be considered,
“Due to the time likely to be taken by the NCLT to consider the approval of JSW Coated’s resolution plan due to pending legal proceedings as well as the extension of the insolvency period on account of the lockdown imposed due to the outbreak of Covid-19, additional time is now available for achieving a successful resolution of ACCIL. Therefore, in keeping with the purpose of the IBC and to promote the best interests of all stakeholders of the corporate debtor, we request you to kindly accord us a fair opportunity to participate in the debt resolution process of ACCIL as a prospective resolution applicant,” an Interups official said asking not to be quoted.
A JSW group spokesperson declined to comment.
The company has plants in Maharashtra and Haryana with an annual capacity of 1 million tonnes.
According to lenders, they have already received feelers from potential bidders to acquire the company and fresh bids will be called in.
JSW Steel has also won the race for Bhushan Power and Steel by offering a Rs 19,700 crore to Indian lenders and was in negotiations with lenders to close the transaction when the Corona pandemic hit the country and a nationwide lockdown was announced. JSW is also awaiting the results of the litigation initiated against the acquisition by former Bhushan Power promoters.
JSW has already acquired Monnet Ispat for Rs 2,875 crore in 2018 under the insolvency and bankruptcy process. It has also decided to reduce its capex by 45 per cent to Rs 9,000 crore in the current financial year.