The process for finding a suitable buyer for the sick steel plants under the Bankruptcy and Insolvency Code has begun.

The corporate Insolvency Resolution Professional (IRP) appointed for Monnet Ispat and Energy has called for expression of interest from buyers.

The last date for submission of EoI by buyers is September 25. Earlier, JSW Steel showed keen interest to buy the company and was the lone bidder, but the process was scrapped as it involved huge haircut for the banks.

With the process of finding a buyer becoming more transparent with no legal hurdle, some of the private equity firms may also join hands with Monnet Ispat’s promoter Sandeep Jajodia to place their bid.

Once the EoI is submitted, the resolution professionals will shortlist the eligible candidates and provide them with additional details to prepare their revival plan.

The request for resolution plan would be called for separately from shortlisted candidates.

Financial bid

Along with this, they have to submit their financial bid within the stipulated period. The resolution professionals, in consultation with the winning bidder, would prepare the final resolution and submit it to the National Company Law Tribunal. The entire process needs to be completed within 180 days, and under special circumstances, an additional 90 days will be granted.

The assets of Monnet Ispat put on the block include a steel-making plant of 1.5-million tonnes per annum, 0.80-mtpa sponge-iron facility, 2-mtpa pellet plant, 0.96-mtpa sinter plant and 230-MW captive power plant in Chhattisgarh.

It also own a coal benefication facility of 7.5-mtpa in Chhattisgarh and Odisha.

Overall debt

As of March 2017, Monnet Ispat’s overall debt decreased to ₹10,330 crore from ₹12,115 crore, and its interest cost increased to ₹1,130 crore (₹1,000 crore).

The company's net sales dipped 33 per cent to ₹1,238 crore. Its net loss widened to ₹2,132 crore (₹1,856 crore).

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