UK-based advisor and distressed steel investor Nithia Capital announced it has completed the acquisition of Crest Steel and Power Pvt Ltd (Crest) for a total consideration of over Rs 600 crore ($80 million).
“This acquisition was completed in partnership with Amalgam Steel Private Limited (ASPL) with Nithia retaining majority control of the partnership,” Nithia Capital said in a statement.
VCCircle reported the development in November last year. Crest has been acquired by Nithia Capital, which bid along with its Founder and Chief Executive Officer Jai Saraf, as per a November order by the National Company Law Tribunal (NCLT), Mumbai bench.
“The acquisition of Crest is an important and strategic step for Nithia and is our second steel investment in India. With our newly forged partnership with Amalgam Steel, we believe Crest will soon achieve a successful turnaround and is well set on its planned growth programme,” Saraf said after the acquisition.
Jharkhand-based Amalgam Steel is a joint venture between Atha Group & Misra Group and is a special purpose vehicle was incorporated to acquire Adhunik Alloys & Power limited & Orrisa Manganese & Minerals Limited through NCLAT. Together the two groups have a combined iron ore mining capacity of 6.0 MTPA, iron ore pellet making capacity in excess of 4.0 MTPA and additional sponge iron and steel billet making capacity.
The total debt of Crest was around Rs 3,651.7 crore (approximately $420 million), of which about 54% was owned by government lenders SBI and Punjab National Bank (PNB). The Committee of Creditors (CoC) including 12 financial creditors such as JM Financial Asset Reconstruction Company (JMFARC) Pvt Ltd, had approved Nithia Capital’s resolution in March 2020.
In March 2019, Crest was admitted by a Mumbai bench of the NCLT on a plea by its operational creditor Indiabulls Real Estate Company Pvt Ltd, which claimed that Crest sought to terminate the Leave and Licence Agreement within the agreed lock-in period. Indiabulls claimed Crest was liable to tender license fees for the unexpired period, and hence dragged it to the insolvency court to claim the fees.
Established in May 2004, Crest is engaged in the manufacturing of iron and steel, that offers products such as sponge iron, pellets, TMT bars, billets, wire rod and captive power plants. Located in Durg, Chhattisgarh, Crest is an integrated steel plant with a current sponge iron capacity of 225 KTPA and steel billet capacity of 80 KTPA. The firm has over 400 acres of land and extensive room for brownfield expansion.
In July, VCCircle reported that Nithia Capital was among the 12 bidders for another Chhattisgarh-based bankrupt steel manufacturer Topworth Steels and Power Pvt Ltd.
Nithia Capital is a London-based alternative investment manager and advisory firm led and founded by Saraf, a former finance director of steel tycoon Lakshmi Mittal-led Ispat International, the previous avatar of Mittal Steel.
At Ispat, Saraf was involved in the acquisition and turnaround of assets. He left Ispat in 1999, his LinkedIn profile shows. Thereafter, he worked with Turkish and Kazakhstan-focused companies for a decade before launching Nithia Capital in 2010.
Nithia Capital specialises in turning around underperforming steel units. Early this year, it completed its first acquisition under the bankruptcy process, by buying alongside US-based CarVal Investors, two units of Uttam Galva Steels Ltd for Rs 2,000 crore.