Tata Steel subsidiary now controls 100% in Rohit Ferro-Tech
Tata Steel Mining Limited (TSML), a wholly-owned subsidiary of Tata Steel Limited has, on June 14, 2022, acquired 10% equity stake held by the financial creditors in Rohit Ferro-Tech Limited (RFT), a subsidiary of TSML, for an amount aggregating to approximately ₹20.06 crore.
Upon completion of the transaction, RFT will become a wholly-owned subsidiary of TSML.
Rohit Ferro-Tech Limited is an indirect subsidiary of Tata Steel Limited and a direct subsidiary of Tata Steel Mining Limited.
On April 11, 2022, TSML successfully completed the acquisition of controlling stake of 90% in RFT in accordance with the approved Resolution Plan pursuant to an order passed by the National Company Law Tribunal, Kolkata, under the Corporate Insolvency Resolution Process of The Insolvency and Bankruptcy Code, 2016.
Rohit Ferro-Tech owed Rs 4,284 crore to different creditors including Rs 3,950 crore to financial creditors.
Tata Steel Mining Ltd, as per its resolution plan, offered to pay Rs 781 crore against the total claims of Rs 4,284 crore and the liquidation value of Rs 490 crore.
As per Tata Steel Mining’s resolution plan, the financial creditors received Rs 515 crore against their claims of Rs 3,950 crore, while operational creditors received Rs 17 crore. Rs 164 crore was set aside for equity infusion over the next six months.
RFT is engaged in the business of manufacturing of high carbon ferro chrome, mild steel billets and stainless-steel flats, within India. It is a well-differentiated player in the Ferro Alloys manufacturing sector.
The turnover/revenue of RFT for the previous three financial years is as under:
FY2020-21: ₹636.34 crore
FY2019-20: ₹739.76 crore
FY2018-19: ₹896.28 crore
TSML has paid cash consideration for acquiring 10% equity stake in RFT i.e., 11,11,111 equity shares of ₹10 each at a premium of ₹170.54 per share, aggregating to a Rs 20.06 crore (approx.) held by its financial creditors. The Transaction has been financed by the Company (through TSML).
Rohit Ferro-Tech was taken to insolvency court by the State Bank of India in February 2020 for defaulting on a payment of Rs 1,792 crore.
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