The first of the 12 big nonperforming loans referred by the Reserve Bank of India for resolution under the Insolvency and Bankruptcy Code (IBC) last year has reached closure with the committee of creditors approving the offer made by a consortium of Aion Capital and JSW Steel for Monnet IspatBSE -0.54 %.
The committee approved the offer on Monday morning, a person with knowledge of the matter told ET.
The offer entails a payment of Rs 2,450 crore to the lenders and equity funding of Rs 1,050 crore. The company owes Rs 10,237 crore. The remaining debt has been acquired by the consortium for Rs 200 crore.
Aion Capital, a joint venture between ICICI Venture and Apollo Global Management, holds a 70% stake in the consortium and JSW Steel has the remaining 30%. ET had reported in December last year that the consortium was the frontrunner for Monnet Ispat.
The consortium will hold 75% in the company while 18% will be held by lenders and 3% by the existing promoters, it is learnt.
The existing promoters of Monnet Ispat, including founder Sandeep Jajodia and his family, currently hold a 25.27% stake in the company while financial institutions and banks hold 47%.
Monnet Ispat owns a 1.5 million tonne integrated steel plant along with an 800,000-tonne sponge iron plant, a 2 million tonne pellet plant, a 960,000-tonne sinter plant and a 230 MW captive power plant in Chhattisgarh.
The company also has 7.5 million tonnes of coal beneficiation facilities in Chhattisgarh and Odisha.
It reported a net loss of Rs 396.6 crore in the October-December quarter. Monnet Ispat’s share closed at Rs 27.80, up 4.32%, on the BSE on Monday while JSW Steel ended at Rs 316, up 2.85%.
According to the RBI, the dozen companies cited above were estimated to account for 25% of gross non-performing assets (NPAs). These companies, including Monnet Ispat, were identified for immediate bankruptcy proceedings in June last year.
