JSW Steel could put in a revised offer to acquire the stressed assets of Monnet Ispat if the lenders led by the State Bank of India are “serious” about selling the assets.
JSW’s initial offer had been rejected by the lenders, but an industry source familiar with the development said the company is “waiting for the progress of the case in the National Company Law Tribunal (NCLT) and would file a revised offer based on the seriousness shown by the banks.”
On Tuesday, the NCLT admitted the insolvency proceedings against Monnet Ispat and Energy after the lenders led by SBI confirmed the default amount to be ₹1,539 crore.
SBI had earlier failed to clarify a mismatch between the claim and the default amount. On Tuesday, the NCLT told the SBI lawyer to take the case “seriously” as the claim amount of ₹2,243 crore was higher than the ₹1,539-crore default by Monnet Ispat.
SBI counsel then clarified that the default amount stood at ₹1,539 crore, and that the balance ₹704 crore had not yet been declared a non-performing asset.
Once the amount was confirmed, Monnet Ispat counsel said the company had no objections to the insolvency proceedings. Last week, Monnet Ispat reported a ₹400-crore loss for the June quarter due to lower sales and higher interest cost, marking its 12th consecutive quarter of losses. Net sales fell 17.7 per cent to ₹346 crore. As of March 2017, the company had a total debt of ₹6,567 crore, it said.
Mounting lossesThe fortunes of Monnet Ispat, which had five captive coal mines, declined after the Supreme Court de-allocated coal blocks in 2014. It had commissioned the steel plant at Raigarh after de-allocation of the mine.
Monnet Ispat was one of the 12 defaulting companies prioritised by the RBI for proceedings under the Insolvency and Bankruptcy Code (IBC).
These companies owe about ₹7 lakh crore. The NCLT will take up almost all the cases over the next few weeks. The Tribunal wants to close the cases quickly.
Meanwhile, India Ratings said banks will have to make an additional provision of ₹18,000 crore on the 12 accounts referred to the NCLT. A bankruptcy court has ruled that a promoter cannot escape the liquidation of personal assets by filing for bankruptcy.