 "Sandeep Jajodia, founder and chairman, Monnet Ispat")
The State Bank of India (SBI) has filed an amendment to its insolvency petition against Monnet Ispat in the National Company Law Tribunal (NCLT) over a wrong claim figure. Hearing in the case has been shifted to July 12.
SBI is the lead banker to the company that has debt of around Rs 10,000 crore. A person close to the development said that in the petition filed by the SBI, the bank had mentioned a claim of about Rs 1,500 crore, which was amended to about Rs 2,200 crore. SBI did not respond to an emailed query.
The Sandeep Jajodia-promoted firm has been in losses for the past three years on account of a slowdown in the steel sector and deallocation of its captive coal mines. In 2016-17, Monnet Ispat’s losses jumped to Rs 2,132 crore, eroding its net worth, which stood at minus Rs 1,602 crore. The company’s losses were Rs 381 crore in the quarter ending June 30, 2017.
The Monnet Ispat scrip closed at Rs 34.10 on Wednesday on the BSE, falling from the previous day’s close of Rs 34.25.
Although the steel sector has shown some signs of revival on protection by the government during the previous financial year, five steel companies have landed in the Reserve Bank of India’s list of 12 companies against which banks have been asked to initiate insolvency proceedings.
Trouble for Monnet Ispat started when the Supreme Court de-allocated coal blocks in 2014. The company had five captive coal mines. The company has a steel plant at Raigarh but it was commissioned after the de-allocation of the linked coal mine.
Empowered by the Banking Regulation (Amendment) Ordinance, 2017, the RBI constituted an internal advisory committee, which at its first meeting on June 12 agreed to focus on large stressed accounts. It accordingly took up for consideration accounts classified partly or wholly non-performing from among the top 500 exposures in the banking system.
The committee recommended for insolvency reference all accounts with fund and non-fund based outstanding amounts greater than Rs 5,000 crore, with 60 per cent or more classified as non-performing by banks as of March 31, 2016. “Under the recommended criterion, 12 accounts totalling about 25 per cent of the current gross NPAs of the banking system would qualify for immediate reference under IBC,” the RBI said in a press statement on June 13. Besides Monnet Ispat, the 12 companies include Bhushan Steel, Bhushan Steel and Power, and Essar Steel.
