Billionaire Sajjan Jindal-owned JSW Steel Ltd has received court approval to acquire bankrupt steel company Asian Colour Coated Ispat after making certain changes to its takeover offer.
The National Company Law Tribunal’s New Delhi bench approved the resolution plan submitted by JSW Steel Coated Products Ltd, a wholly owned unit of JSW Steel, with certain modifications, the steelmaker said in a regulatory filing.
JSW Steel didn’t specify what those modifications were and said the NCLT’s written order was still awaited.
The bankruptcy court’s approval comes more than a year after Asian Colour’s lenders cleared JSW’s plan.
In July last year, lenders to Asian Colour had by an 80% vote share approved the offer of Rs 1,550-crore from JSW Steel to acquire the distressed company that operates a 1 million tonne steel plant. The offer included an upfront payment to lenders of Rs 1,525 crore and a payment of Rs 25 crore to operational creditors.
JSW Steel’s bid meant Asian Colour’s financial creditors would take a haircut of about 75% on their total outstanding debt of more than Rs 6,000 crore. The haircut for operational creditors would be even more considering the company owed them over Rs 500 crore.
This will be the third acquisition of a stressed asset by JSW Steel. Two years ago, JSW Steel had teamed up with private equity firm AION Capital to acquire Monnet Ispat and Energy Ltd under the Insolvency and Bankruptcy Code (IBC) for Rs 2,875 crore. In December 2019, JSW acquired Vardhman Industries Ltd by infusing Rs 63.50 crore into the company.
The steel major, along with AION Capital, has also got approval to buy debt-laden Bhushan Power and Steel Ltd for around Rs 19,700 crore. The deal is currently stuck because of litigation in the Supreme Court.
Asian Colour was part of the second list of 28 corporate defaulters listed by the Reserve Bank of India (RBI) to be referred for resolution under the Insolvency and Bankruptcy Code. Its lenders included State Bank of India, Bank of Baroda, Punjab National Bank and IDBI Bank.
The company had filed for insolvency in July 2018, after which the NCLT admitted a resolution application filed by SBI.
Gurugram-based Asian Colour has factories near Delhi and Mumbai, and caters to markets across West Asia, Europe, Africa, Latin America and North America, besides India.