NCLT nod to acquisition of National Steel & Agro Industries by JSW Group
The OP-Jindal led JSW group has made another acquisition through the Corporate Insolvency Resolution process (CIRP) as the National Company Law Tribunal (NCLT) approved the Rs 621-crore resolution plan submitted by its group firm JSW Steel Coated Products for National Steel and Agro Industries.
National Steel and Agro Industries had been undergoing Corporate Insolvency Resolution Process (CIRP) since April 2022, when financial creditor JM Financial Asset Reconstruction Company dragged the company to NCLT for defaulting on a loan amount of Rs 115 crore given by a consortium of banks led by IDBI Bank.
The committee of Creditors had approved the resolution plan submitted by JSW Steel Coated Products in October 2022.
Features of the resolution plan
| Creditors | Admitted claims (Rs cr) | Amount provided for in Resolution Plan (Rs cr) | Source of funds for resolution applicant |
| Financial creditors | 1,687 | 612.38 | Internal sources of the Successful Resolution Applicant |
| Operational Creditors (other than workmen and employees | 330 | 5.58 | Debt |
| Workmen and employees | 3.03 | 3.03 | Debt |
| Total | 2,023 | 621 |
As per the resolution plan submitted by JSW group, secured financial creditors will get Rs 612.38 crore against their admitted claims of Rs 1,687 crore and operational creditors (vendors, workmen and employees) receive Rs 8.62 crore for their admitted claims of Rs 337 crore.
The successful resolution applicant proposes to pay Workmen and Employees in full as per the admitted amount against the dues of Workmen (Rs 83.61 lakh) and employees (Rs 2.20 crore).
Out of the total resolution amount, JSW Group proposes to infuse a sum equivalent to and for the payment of unpaid CIRP Costs; other operational creditors; and excess interim management cost, which will not be more than the total resolution amount by way of an interest-bearing unsecured loan and/or convertible debentures or any other convertible instrument or a combination thereof.
JSW Steel Coated Products proposes to infuse funds in one or more tranches, for an amount of Rs 20 crore as equity (by way of subscription to equity shares and/or compulsorily convertible debentures), quasi equity and/or other securities and/or shareholder debt and/or deposits, third party debt or a combination thereof (as may be determined by the resolution applicant in its sole discretion) into National Steel and Agro Industries towards debottlenecking capex of the corporate debtor.
According to the resolution plan, all existing equity and preference shares of National Steel and Agro Industries will be cancelled.
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 Read: Lenders of National Steel and Agro Industries accept resolution plan by JSW arm
