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Monnet Ispat declared insolvent despite JSW offer

Debts swelled to Rs 12,500 cr during slack in steel industry, after its coal mines were de-allocated

Veena Mani  |  New Delhi 

Monnet Ispat declared insolvent despite JSW offer

The National Company Law Tribunal (NCLT) has declared the Sandeep Jajodia-promoted insolvent, following a fierce battle with its lenders.

The board of stands dissolved and the company’s ownership goes into the hands of an interim resolution professional who will initiate the insolvency process. 

Insolvency professionals said the Sajjan Jindal-promoted Steel could now submit a bid for acquisition of the company. “The first action to be undertaken by the interim resolution professional is to issue an advertisement seeking bids from interested buyers,” said an insolvency professional.

A questionnaire to the spokesperson went unanswered. 

In a previous hearing of the NCLT, Mumbai, held last week, had contested the loan amount and had stated it was in talks with Steel for a sale. While the creditors claimed the amount in default was Rs 2,243 crore, the company said it had defaulted on Rs 1,539 crore. The rapped State Bank of India, the primary lender to Monnet Ispat, for not presenting the actual picture on the liabilities of the company. SBI had to revise its petition, which was admitted.

The debts of swelled to Rs 12,500 crore during a slowdown in the and after its coal mines were de-allocated. The company’s attempts at restructuring its debt also failed.

Steel had in February made an offer to acquire a stake in Though the offer still stands, the joint lenders’ forum headed by SBI has not approved it.

is one the 12 accounts identified by the Reserve Bank of India (RBI) for insolvency proceedings. Empowered by the Banking Regulation (Amendment) Ordinance, the constituted an internal advisory committee, which after its first meeting on June 12, agreed to focus on large non-performing accounts in the banking system. With this order, has 180 days, with an extension of 90 days, for restructuring. If it misses the deadline, the company’s assets will be liquidated.

had a consolidated net debt of Rs 12,000 crore on March 31, 2016. Its debt-equity ratio is 9.26, it has been making heavy losses for a couple of years, and its net worth has been eroded significantly. 

First Published: Wed, July 19 2017. 00:06 IST