Nithia Capital Resources, a London-based distressed assets advisory that has emerged as the successful bidder for the distressed companies of Uttam Galva along with CarVal Investors, is also interested in acquiring Visa Steel, the company has said.
The acquisition of the 0.5-million-tonne Odisha-based steel plant will be in line with Nithia’s strategy of acquiring steel plants with less than one million tonne capacity backed by funds from institutional investors. For Visa Steel too, Nithia will reach out to Car-Val that will have the first right to view its plan and decide on whether it would like to pitch in with the necessary funds.
“Nithia has a strategy to create a consolidated steel operating platform of upto two million tonnes of steel production per year in India,” Jai Saraf, founder of Nithia Capital told ET in an interaction.
“We are in discussion with various banks and actively looking at several steel assets in eastern and central India including Visa Steel,” he said.
Saraf is a former finance director of Lakshmi Mittal-led Mittal Steel before it had acquired Arcelor in 2006 to become ArcelorMittal. Since 1989, he has been involved in the acquisition and turnaround of assets across geographies, including in Trinidad & Tobago, Mexico, Kazakhstan and Germany, among others.
Visa Steel featured in the Reserve Bank of India’s second list that contained more than two dozen stressed accounts to be referred to the insolvency tribunals across the country. State Bank of India had referred the company to the Kolkata NCLT last year but with the promoters challenging the move in the Odisha High Court, the company is yet to be admitted for insolvency.
The asset owes around Rs 3,600 crore to banks. Recently, Bank of Baroda put its exposure of Rs 150 crore to the asset on the block as its insolvency resolution keeps getting delayed.
Visa Steel declined to comment in response to an emailed query as the matter is sub judice. Nithia Capital has not closed any deal yet in the Indian market. Its offer for Uttam Value Steels and Uttam Galva Metaliks has been challenged by the second highest bidder SSG Capital Management in the NCLT, delaying the tribunal’s approval of its plan.
Source: Economic Times