Steel Baron Sajjan Jindal’s JSW is the sole bidder for the debt trapped Monnet Ispat, and is expected to soon gain control of it. But the committee of creditors first want to get comfort of a legal opinion that this transaction is not between related parties given the close family ties between the two companies, ET Now learns from reliable sources. Sajjan Jindal’s sister is married to Monnet IspatBSE 0.18 %’s promoter Sandeep Jajodia.
According to the new section 29A of the Insolvency & Bankruptcy Code, incumbent promoters as well as connected persons are barred from bidding.
“JSW in partnership with Aion is the lone bidder and has a very strong case to take control of Monnet Ispat and the creditors have also negotiated the bid price. But it is advisable to err on the side of caution, so that no allegation is ever raised about a big haircut being given to a family member’s company,” said a source close to the development.
Sources added JSW has already taken a legal opinion on this family connection, and gotten a green signal of this not being considered a “related party” transaction.
JSW-Aion is believed to have struck a Rs 3,700 cr deal with the creditors, and this includes Rs 2,700 cash to lenders and Rs 1,000 cr as equity.
