Lenders of National Steel and Agro Industries accept resolution plan by JSW arm
The Committee of Creditors (CoC) of Mumba-based National Steel and Agro Industries Ltd (NSAIL) has approved the resolution plan submitted by JSW Steel Coated Products Limited. The company said in an exchange filing recently.
National Steel and Agro Industries has been undergoing Corporate Insolvency Resolution Process (CIRP) since April this year, when financial creditor JM Financial Asset Reconstruction Company Limited dragged the company to the National Company Law Tribunal (NCLT) for defaulting on a loan amount of Rs 115 crore given by a consortium of banks led by IDBI Bank.
The MP-based company owed Rs 2,023 crore to different creditors as per the admitted claims by resolution professional Dushyant C Dave. Of the total admitted claims, financial creditors owe Rs 1,686 crore.
A consortium of banks led by IDBI had sanctioned a loan of Rs 1,431 crore out of which Rs 125 crore was disbursed. Other banks in the consortium were State Bank of India, State Bank of Travancore, Bank of Maharashtra, United Bank of India, Andhra Bank, Oriental Bank of Commerce, State Bank of Patiala, Central Bank India, Punjab National Bank and Bank of India.
An amount of Rs 115 crore became non-performing assets on 30 September 2018. National Steel and Agro Industries admitted that a similar amount was recognised as default on its balance sheet.
The banks sold of the loan asset to JM Financial Asset Reconstruction Company, which later followed up with the default case and moved NCLT against the company.
Promoters of the National Steel and Agro Industries contended in the NCLT that it was in talks with the IDBI Bank-led consortium for one time settlement of the bank loan. It claimed that it had initially submitted a Onetime Proposal (OTS) to the IDBI Bank Limited Consortium for an amount of Rs. 375 crore. Later, the said proposal was revised to Rs. 430 crore.
The National Steel and Agro Industries even claimed that it had already deposited amount of Rs. 15.85 crore to the consortium banks.
However, these claims, said the NCLT, established the default and therefore, the tribunal admitted the insolvency petition filed by JM Financial Asset Reconstruction Company.
If the NCLT also approves the resolution plan submitted by JSW Steel Coated Products Limited, it would the second such acquisition by the company through the CIRP process. Earlier, it had acquired Asian Colour Coated Ispat Ltd.
National Steel and Agro Industries manufactures and exports steel from Dhar in Madhya Pradesh.
It is primarily known for its flat steel products (Cold Rolled Coil, Galvanised Corrugated Sheets, Colour Coil & Pre-painted Profile sheets, etc.). These products are marketed under different brands and can be distinguished by their product logos. It is one of the most successful & preferred brands of steel in India.
Also See: Resolution Plans
