Steel maker Ramsarup files for insolvency

Incorporated in 1979, the company manufactures wires, TMT bars and steel

Kolkata-based steel company Ramsarup Industries has filed for insolvency in an attempt to restructure its finances. The company has filed for insolvency under the Insolvency and Bankruptcy Code (IBC), 2016, which was brought in to ensure timely restructuring of companies and help banks recover loans. The company has a debt of around Rs 2,000 crore, say sources close to the development. The lenders include 14 major banks like State Bank of India, Punjab National Bank, Allahabad Bank, Bank of India, IDBI Bank, Canara Bank, Central Bank of India, and ICICI Bank. 

Among the top lenders are Punjab National Bank (loan exposure Rs 411 crore), IDBI Bank (Rs 242 crore), United Bank of India (Rs 184 crore) and Axis Bank (Rs 147 crore). Apart from banks, the company owes Rs 155 crore to financial institutions such as LIC Mutual Fund, Tata Capital, Edelweiss Finance and Investments Limited. A source close to the development said while the principal debt is Rs 2,000 crore, the amount works out to Rs 3,000 crore when taken along with interest. IRR Insolvency Professionals Private Limited has been appointed to handle the case. 

Statutory dues that are under litigation are estimated at Rs 273 crore. These dues are towards central excise, value-added tax, provident fund, service tax, wealth tax, and others. The company's revenue was Rs 44 lakh for the quarter that ended on March 31. The company has been suffering losses for the last three consecutive quarters. 

In an attempt at recovering its dues, Punjab National Bank put up Ramsarup Industries' unit Ramsarup Nirmaan Wires for sale. In 2010, the company had planned to restructure its finances. 

To do so, it had asked financial institutions to waive off the interest. 

The company had planned to raise Rs 700 crore by way of fresh debt and equity to finance expansion and conduct upgrades, and to meet working-capital needs as part of the restructuring plan. 

In 2012, banks objected to the financial-restructuring plan and demanded a change in the promoters of the company. In 2016, the company was declared a wilful defaulter by banks. 

Incorporated in 1979, the company manufactures wires, TMT (thermo mechanically treated) bars, and steel.