Vedanta implements resolution plan to bag Ferro Alloys via NCLT route

Company's foray into ferro alloy business to strengthen its steel business portfolio

Anil Agarwal-led Vedanta Ltd on Friday said it is implementing the resolution plan for the acquisition of insolvent Ferro Alloys Corporation Limited (FACOR) approved by the Cuttack bench of National Company Law Tribunal (NCLT).

The consideration payable for the acquisition of FACOR on debt and cash free basis under the approved plan stands at Rs 10 crore. Alongside, an equivalent cash balance in FACOR’s subsidiary, FACOR Power Limited (FPL) is also payable upfront having zero coupon, secured and unlisted Non-Convertible Debentures (NCD) of aggregate face value of Rs 270 crore to the financial creditors payable equally over four years commencing March 2021.

Vedanta Limited will acquire management control and as per approved resolution plan as it will hold 100 per cent of the paid-up capital of FACOR, Vedanta said in a regulatory filing.

Through the NCLT route Vedanta Ltd had recently acquired insolvent Electrosteel Ltd.

FACOR owns a ferro chrome plant with capacity of 72,000 tonne per annum, two operational chrome mines and a 100 MW captive power plant through its subsidiary, FACOR Power Limited (FPL). The chrome plant and the mines are located in Orissa and its turnover in FY 2019 stood at Rs 580 crore.

The acquisition will complement Vedanta’s existing steel business as the vertical integration of ferro manufacturing capabilities and has the potential to generate significant efficiencies that will help Vedanta increase steel business portfolio, said the release.