Sole bidder JSW Steel's Rs 1,200 crore offer for downstream company, Asian Colour Coated Ispat Limited, may be under a cloud, as the resolution professional and the committee of creditors have moved the National Company Law Tribunal (NCLT), seeking an extension of deadline.
Resolution professional (RP), Kuldip Kumar Bassi, said that an extension had been sought in NCLT. "Everybody's objective is maximisation of value, it would be good to have some competition," he said. Asked whether fresh bids would be invited, Bassi said, it would be a CoC (committee of creditors) decision if the extension was granted.
The 270-day CIRP deadline for Asian Colour Coated would end on April 16. The maximum stipulated time for a resolution under the IBC is 270 days. The deadline for submitting bids for Asian Colour Coated was March 8. The application is to extend the CIRP duration.
JSW Steel has submitted a Rs 1,200 crore bid for Asian Colour Coated Ispat which includes Rs 800 crore for secured financial creditors and Rs 400 crore for unsecured creditors. Asian Colour Coated - part of the Reserve Bank of India's second list of non-performing assets - has a debt of around Rs 4,900 crore with SBI having the largest exposure at Rs 1,600 crore.
A senior JSW official said that it had no information about the bid deadline extension but in any asset resolution under IBC, processes need to be followed. As such, extension if it happens post one-month bid deadline would be challenged at multiple levels, which has surpassed the 270-days' resolution window.
Sources indicated that a clutch of financial institutions and private equity players might have evinced interest in the company.
Asian Colour Coated has a cold rolling mill with downstream galvanising and colour coating lines at Bawal, Haryana. The manufacturing facilities are spread across three locations in proximity to Delhi and Mumbai. It caters to markets across Europe, Africa, Latin and North America, besides India.
For JSW Steel, if it manages to bag this asset, it would be the third under the IBC. JSW Steel's resolution plan for Bhushan Power & Steel is being heard in NCLT for approval. The duration of the CIRP for that asset too has crossed the stipulated 270 days.
Also, AION-JSW Steel had acquired another insolvent company, Monnet Ispat & Energy. In Monnet Ispat too, AION-JSW Steel was the sole bidder.
JSW Steel is adding upstream capacity. Hence, Asian Colour Coated as a downstream facility is of interest to the company. By the end of the current financial year, JSW would adding five million tonnes at Dolvi. It will also be increasing capacity at Vijayanagar from 13 to 18 million tonnes.
While JSW Steel has downstream capacity at its plants, it would not be enough for the additional upstream capacity. With Asian Colour Coated, JSW already has an existing customer relationship.
JSW Steel offers Rs 1,200 crore for Asian Colour Coated Ispat
Lenders, RP move NCLT for extension
AION-JSW has already bagged Monnet Ispat & Energy while JSW's plan for Bhushan Power is being heard in NCLT