Jindal Saw, promoted by Prithviraj Jindal, emerged the highest bidder offering about Rs 530 crore for Sathavahana Ispat, undergoing corporate insolvency, said two people aware of the development.
Billionaire Anil Agarwal-promoted Vedanta Ltd was also in the fray to acquire the stock exchange-listed steel maker. In a statement to the exchange on Monday, the company said lenders issued a letter of intent to Jindal Saw as a successful resolution applicant. The stock notice does not disclose the offer made by Jindal Saw to acquire the steel company.
ET reported on November 21 last year that Jindal Saw is expected to be the highest bidder for the steel company.
Jindal Saw did not respond to ET’s request for comments.
Besides Jindal Saw, six other companies submitted expressions of interest (EOI). These are Vedanta Ltd, Welspun Corp Ltd, Sarda Mines Ltd, Ares SSG Capital (Singapore) Ltd, Khandwala Finstock Pvt Ltd and Trimex Industries Pvt Ltd, according to the disclosures made by the RP on the company’s website.
J C Flower Asset Reconstruction Company is the sole creditor with an admitted claim of Rs 1747 crore. In June last year, a consortium of lenders led by Canara Bank sold their entire debt of Sathavahana Ispat to J C Flowers ARC at a Swiss auction.
In May last year, lenders had received an anchor offer of Rs 410 crore from J C Flowers ARC under a Swiss auction. Pridhvi Asset Reconstruction & Securitisation (Paras) Ltd, an ARC, in partnership with Megha Engineering, gave a counteroffer of Rs 531 crore.
JC Flowers ARC matched the counteroffer given by Paras the next day. Under a Swiss auction, the anchor bidder has the right to match the counteroffer.
A month later, Sathavahana Ispat entered corporate insolvency at the behest of a petition filed by J C Flowers ARC.
The J C Flowers ARC’s acquisition of the distressed steel company was backed by Siddeshwari Tradex, the holding company of P R Jindal group, as reported by ET last November. Siddeshwari Tradex had availed five-year Rs 500 crore funding from Edelweiss Special Opportunities Fund and ECL Finance. The funding was against the exclusive pledge of Jindal Energy, Jindal Steel, Jindal Power & Steel, and Jindal Holdings, per the stock exchange disclosures.
Sathavahana Ispat has a 50 mega-watt captive power plant and one plant each in Andhra Pradesh and Karnataka producing pig iron and ductile iron pipe.
