Monnet Ispat Q2 loss widens to Rs 28.5 bn on impairment of assets' value

Monnet Ispat and Energy Ltd (MIEL) Monday reported a net loss of Rs 28.59 billion for the quarter ended September 2018 due to impairment of the value of its assets.

Its net loss was Rs 3.53 billion in the year-ago quarter, said MIEL, a joint venture company of AION and JSW Steel Ltd.

The company's total income, however, increased to Rs 4.23 billion in July-September quarter of 2018-19 financial year as compared to Rs 3.183 billion in the corresponding period of the previous year.

Its net loss widened sharply because of an exceptional item of Rs 27.72 billion on account of impairment of value of its assets.

This includes impairment of property plant and equipment amounting to Rs 24.40 billion and impairment of investments, inventories, receivables, current and non-current assets aggregating to Rs 15.58 billion considered not realisable. It also wrote back its certain liabilities from the book totalling Rs 12.26 billion.

Monnet Ispat, once one of the country's foremost steelmakers, ran a successful coal-based sponge iron plant with an annul capacity of 1.5 million tonnes in Chhattisgarh.

It ran into problems when coal mines attached to the plant were cancelled in 2014 after a Supreme Court order. Crashing steel prices on account of Chinese dumping further aggravated its crisis and resulted into bankruptcy proceedings.

Following insolvency proceedings, AION-JSW consortium accrued the company.