JSW Steel to close Vardhman Industries deal by December

Suresh P Iyengar Mumbai | Updated on December 24, 2019

Hopes to close Bhushan Power and Steel, Asian Colour Coated acquisition by March quarter

Sajjan Jindal-promoted JSW Steel plans to close the deal to acquire Vardhman Industries for ₹127 crore by December-end as it has received the clarification sought from the National Company Law Appellate Tribunal (NCLAT).

The company also expects the acquisition of Asian Colour Coated and Bhushan Power and Steel, to be completed by the March quarter.

Seshagiri Rao, Joint Managing Director, JSW Steel told BusinessLine that the clarification given by NCLAT in the case of Vardhman Industries is very satisfactory and the fund will be transferred by this month end.

As per the approved resolution plan, JSW Steel will infuse ₹63.5 crore in Vardhman Industries through equity shares or debt within 30 days from the date of NCLT order. It will pay ₹62.5 crore to financial creditors while operational creditors will get ₹1 crore.

Vardhman Industries manufacture galvanised tubes, coils, precision steel tubes, corrugated steel tubes, cold rolled steel sheets and others.

Bhushan power delay

Asked whether the government is more receptive to foreign companies as it provided immunity to ArcelorMittal promoters for acquiring Essar Steel quite fast by amending the Insolvency and Bankruptcy Code while JSW Steel has been waiting for over six months, Rao said “I do not think so. As and when we raised the issue they listened. First it was thought that we are trying to delay the deal, but our stand was vindicated when Enforcement Directorate attached the asset under PMLA (Prevention of Money Laundering Act)”.

Now, the attachment of asset has been stayed by the Supreme Court. It is not the question of who is raising the issue, but whether it is genuine or not is to be seen, he said.

The Government has already introduced the IBC amendment bill in the Parliament and in the Budget session it will be passed, he said.

The case will be upfor hearing in NCLAT on January 13 for the first time after IBC amendment and the court will also take up the case filed by the CoC in February. The issue has been addressed at the highest level, said Rao.

Published on December 24, 2019

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