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Insolvency: Tata Steel, 3 others submit resolution plans for Electrosteel

With Electrosteel, two of the five steel companies on RBI's list of 12 crossed deadline for submitting resolution plans

Ishita Ayan Dutt Namrata Acharya & Dev Chatterjee  |  Kolkata/Mumbai 

Steel makers, metal, industry, steel firms

Tata Steel, Vedanta, Edelweiss ARC, and are likely to have submitted resolution plans for Electrosteel Steels, one of the 12 mandated by the Reserve Bank of India (RBI) for insolvency.

The last date for submitting resolution plans was Thursday.

A spokesperson said: “As a process, we do assess and evaluate various strategic opportunities for growth. This is an ongoing process in the company.” An e-mail sent to went unanswered while Edelweiss did not comment.

has got a 90-day extension from the (NCLT), and it is with effect from January 17, 2018. According to the rules, an application for an approved resolution plan has to be filed with the within 180 days, and can be extended by another 90 days.

Resolution plans, however, could be accepted even beyond the deadline.

With Electrosteel Steels, two of the five steel on the RBI’s list of 12 have crossed the deadline for submitting resolution plans, the first being Monnet, however, had received a single bid from JSW Steel.


Among those who had submitted an expression for interest for were Srei Infrastructure Finance and Mesco Steel, apart from Tata Steel, Vedanta, and Sources indicated that even Liberty House was interested. Asked whether Liberty House had submitted a resolution plan, a spokesperson said, “At this point, we don’t have anything to say.”

Hemant Kanoria, chairman of Srei Infrastructure Finance, said it was not putting in a bid for the company. Srei has an exposure of Rs 3-4 billion in Electrosteel.

has a debt of about Rs 102.88 billion from a consortium of banks. A number of stumbling blocks had tripped Electrosteel Steels, such as delay in commissioning, which increased the project cost by 20 per cent.

Electrosteel has a planned steelmaking capacity of 2.51 million tonnes and a commissioned capacity of 1.5 million tonnes.

Banks had supported the company largely due to raw material linkages. Electrosteel Steels was promoted by Electrosteel Castings, which had secured Parbatpur coal mines, having reserves of 231 million tonnes. Plus, it had an iron ore mine and a non-coking coal mine in Jharkhand.

Electrosteel Steels was to source iron ore and coking coal from for a period of 20 years. But the coal blocks of were de-allocated in 2014, forcing Electrosteel Steels to buy raw materials from the market at high prices, even as prices for the product witnessed a crash.

Electrosteel was one of the first for which lenders had applied strategic debt restructuring when the came up with the mechanism to tackle bad loans. Incidentally, was one of the front runners when the company was initially put on the block.

First Published: Fri, January 05 2018. 01:31 IST