JSW-AION consortium gets NCLT nod to acquire Monnet Ispat

By Shailaja Sharma

  • 19 Jul 2018
Credit: Bhakti Nair/VCCircle

The National Company Law Tribunal on Thursday approved the sale of bankrupt metals firm Monnet Ispat & Energy Ltd to a consortium of steelmaker JSW Steel Ltd and distressed assets player AION Capital.

The consortium will hold a 75% stake in Monnet Ispat, billionare Sajjan Jindal-led JSW Steel said in a statement. AION Investments Private II Ltd holds 70% stake in the consortium while JSW Steel owns the remaining.

The approval by the NCLT's Mumbai bench came after the committee of creditors (CoC) of Monnet Ispat had cleared the resolution plan by the consortium in April.

The NCLT approved the resolution plan at Thursday’s hearing, the statement said. The written order of the NCLT is awaited, it added.

AION Capital Partners is a joint private equity fund sponsored and run by US-based Apollo Global Management and homegrown PE firm ICICI Venture.

AION Investments and JSW Steel had in December submitted a Rs 3,500 crore joint plan for Monnet Ispat. This plan was revised on 1 March 2018.

The approval is significant for JSW Steel, which lost out to Tata Steel Ltd for acquiring Bhushan Steel and to ArcelorMittal SA for Italian steelmaker Ilva SpA. JSW is now focused on acquiring smaller steel plants in the domestic market and overseas, a top executive said recently.

Earlier this year, JSW agreed to acquire US-based steel mill owner Acero Junction Holdings Inc. for up to $80.85 million (Rs 527 crore then) to expand its North America operations.

Monnet Ispat was one of the dozen large loan defaulters identified by the Reserve Bank of India on its first bankruptcy-resolution list under the Insolvency and Bankruptcy Code last year. Incorporated in 1990, Monnet Ispat operates two mills in Raipur and Raigarh. It owes over Rs 10,000 crore collectively to about 39 lenders.

In another major takeover of a stressed steel asset, Tata Steel in May completed the acquisition of Bhushan Steel after receiving all necessary approvals.

The steel industry in India, the world’s third-biggest producer of the alloy, is undergoing a churn as large local and foreign companies battle it out to acquire debt-laden assets put up for sale by banks cleaning up their books.

Shares of Monnet Ispat rose 1.3% to Rs 10.82 each on the BSE on Thursday in a flat market. JSW Steel gained 2.6% to end at Rs 304.45 apiece.

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