IBC proceedings: JSW Steel offers Rs 37 billion for Monnet Ispat

The amount offered earlier was Rs 35 billion but the lenders negotiated and JSW Steel agreed to add another Rs 2 billion, official said

JSW Steel has offered Rs 37 billion for Monnet Ispat which is undergoing the insolvency resolution proceedings that are expected to be completed by mid-February, sources said.

JSW is a bidder in the resolution proceedings of Monnet Ispat, which owes more than Rs 100 billion to its lenders.

An email query sent to JSW Steel remained unanswered.

"Out of Rs 37 billion, Rs 27 billion will be paid as cash to lenders. It would invest Rs 10 billion as equity which will be used for settling dues of employees and workmen, operational creditors and used for the day-to-day running of the company," said the source requesting anonymity.

The amount offered earlier was Rs 35 billion but the lenders negotiated and "JSW Steel agreed to add another Rs 2 billion", he said.

The last date to submit the plan was December 23 and JSW Steel along with AION Capital is the only firm which has submitted resolution plan, he said.

As per the rules, the entire insolvency process has to end within 270 days. Priority should be 180 days and if not cleared another 90-day time can be sought.

Monnet Ipsat is among the 12 defaulters referred by the Reserve Bank of India (RBI) for insolvency proceedings.

Monnet Ispat and Energy Ltd (MIEL), the flagship company of Monnet Group, has a sponge iron unit with a capacity of one lakh tonnes per annum (TPA).

MIEL has an integrated steel plant at Raigarh which has a production capacity of 1.5 MTPA to produce HR (hot rolled) plates, rebars and structure profiles to cater to the rapidly growing infrastructure and construction industry.

Sajjan Jindal-led JSW Steel is in expansion mode. It has plans to raise its capacity to 45 MT by 2030 from 18 MT at present.

Besides Monnet Ispat, the top steel maker is also eyeing Bhushan Steel and Bhushan Power and Steel.