The decks have been cleared for Vedanta Ltd’s acquisition of Ferro Alloys Corporation Limited (FACOR). In a notification to the BSE on Friday, the Anil Agarwal-led resources major said it is implementing the approved Resolution Plan for Ferro Alloys Corporation Limited (“FACOR”) as per an order of the National Company Law Tribunal Cuttack, dated January 30, 2020.
This is Vedanta’s second major acquisition through the auction of stressed steel assets under the Insolvency and Bankruptcy Code. It follows Vedanta’s acquisition of Electrosteel Steels through the IBC-led process in 2018 for around Rs 5,320 crore.
“The consideration payable for the acquisition of FACOR on debt and cash free basis under the approved Resolution Plan is Rs 10 crore as well as equivalent of cash balance in FACOR’s subsidiary, FACOR Power Limited (FPL),” the notification said. It will be part of “an upfront payment and zero coupon, secured and unlisted Non-Convertible Debentures of aggregate face value of Rs 270 crore to the financial creditors payable equally over four years commencing March 2021,” the statement added. The acquisition will complement Vedanta’s existing steel business as the vertical integration of ferro manufacturing capabilities has the potential to generate significant efficiencies and will help Vedanta to increase its portfolio in steel business.
