Nalwa Steel & Power, two others submit resolution plans for McNally Bharat

The three are among 17 entities to have shown interest in the Khaitan-owned Williamson Magor group firm, which is said to owe over Rs 3,700 cr various creditors

Naveen Jindal-owned Nalwa Steel & Power, and two other firms, namely, Amit Metaliks and BTL EPC (formerly Bengal Tools), have submitted resolution plans for engineering, procurement and construction (EPC) firm, McNally Bharat Engineering Company Ltd, which is undergoing insolvency resolution process.

The three firms are among 17 entities to have shown interest in McNally Bharat, which is part of the Khaitan-owned Williamson Magor Group, multiple sources close to the development said. The resolution professional did not comment.

On Tuesday, McNally informed the stock exchanges about the receipt of the resolution plans from the three prospective resolution applicants on December 5, without disclosing the names.

Debt-laden McNally, which has been blamed for the gradual unravelling of the Williamson Magor Group, was brought under the corporate insolvency resolution process (CIRP) on April 29, on an application filed by Bank of India (BoI) under the Insolvency and Bankruptcy Code (IBC).

According to the total claim amount provisionally admitted on November 13, McNally owes banks about Rs 3,706 crore. BoI's share is the biggest, at 19.56 per cent of this amount, followed by Axis Bank, State Bank of India, and IDBI Bank, all of which have more than 10 per cent share in the claims. There are other financial creditors as well.

One of the bidders said presentations would now be made before the committee of creditors to take the process forward.

McNally provides turnkey solutions to the power, steel, coal & mining, port, aluminum, material handling, mineral processing, cement, water, oil & gas and infrastructure sectors.

As far as the bidders are concerned, Nalwa is a long-product steel manufacturer with a factory at Raigarh. It is part of one of the country’s top steel producing groups. Amit Metaliks is one of the vertical parent companies of Amit Alliance, which includes associate firms like Amit Mines, VSP Udyog and Takshvi Infra. BTL EPC is part of the Shrachi groupm which has diverse interests.

McNally, it may be mentioned, ran into debt during a downturn in the EPC industry. The Khaitans tried to thrash out a resolution outside the IBC framework, but that didn’t work.

Before that, the former promoters tried bailing it out by extending financial support from group companies – Eveready Industries India and McLeod Russel India – to avoid a default. Promoter shares in the companies were pledged to borrow funds for McNally. And as borrowers called in pledged shares, the promoter holding fell in the companies.

In Eveready, where the Burman family, promoters of Dabur, are in control, the Khaitan holding at the end of September was at less than 5 per cent; in McLeod, it stood at 6.25 per cent but a debt restructuring is in the works with the banks, which may shore up the stake post-fund infusion.