Jindal Saw acquires Hyderabad-based Sathavahana Ispat for Rs 694 crore
The National Company Law Tribunal has approved the Rs 694 crore resolution plan of Jindal Saw Limited for Hyderabad Sathavahana Ispat. Jindal Saw was one of the seven resolution applicants vying for the assets of Sathavahana Ispat. Vedanta Ltd was one of those seven looking to acquire the corporate debtor.
As per the approved resolution plan, Jindal Saw will infuse an amount equivalent to Rs 694 crore towards admitted claims and contingent claims. Further, CIRP cost will be reimbursed on actuals as incurred till the date (31 March 2023) of approval of resolution plan.
Here’s a brief of the Resolution Plan:
| Category of creditors | Admitted Claims (Rs cr) | Provided for in the Resolution plan (Rs cr) | % realisation |
| Secured financial creditors | 1,747 | 672 | 38.5% |
| Workmen and employees | 8 | 8 | 100% |
| Govt dues | 32.22 | 12.40 | 38.5% |
| Others | 64.73 | 1 | 0.65% |
| Total | 1852 | 694 | 35.5% |
Additional Liability on the incoming investors due to the transaction, source of such funding etc
In accordance with the approved Resolution Plan, the liability of Successful Resolution applicant (Jindal Saw) will only be limited to making the payments as agreed in the approved Resolution Plan.
Brief description of business strategy
Jindal Saw will effectively utilize the available capacities of Sathavahana Ispat to increase production in order to benefit from the operating leverage. Due to the brand image and market goodwill of Jindal Saw with its major customers who have running projects across the country, it is in a position to book substantial orders for the unit of the Corporate Debtor in a short span of time and thus making the plant carry out invoicing from the very first day of the start of commercial production. The approved Scheme of Merger of Corporate Debtor with Jindal Saw, by the Adjudicating Authority, would help to take advantage of business synergies of the successful resolution applicant and the corporate debtor.
Details of the delisting plan as approved in the Resolution Plan
With effect from the Effective Date of the Resolution Plan being 31 March 2023 (the date of the approval of the Resolution Plan by the Adjudicating Authority), the Equity Shares of the Sathavahana Ispat will be deemed to be delisted from the Stock Exchanges with no consideration to be paid to the existing shareholders.
About Sathavahana Ispat
Sathavahana Ispat Limited is a public limited company incorporated under the Indian Companies Act 1956 in 1989 with limited liability by shares. It was originally promoted by AS Rao, a first generation entrepreneur and is at present a widely held company with its shares listed on the Indian premier bourses — BSE and NSE.
Sathavahana Ispat is primarily engaged in the manufacture and sale of (i) Pig Iron with a rated capacity of 210,000 tpa; (ii) Metallurgical Coke with a rated capacity of 450,000 tpa and (iii) co-generation cum thermal power of 50 MW. As a backward integration, SIL has set up a 2,98,800 tonns per annum sinter plant and 30Mw captive thermal power plant and as a forward integration has setup a 210000 tonns per annum Ductile Iron making plant.
The insolvency application against Sathavahana Ispat was filed by operational creditor Thirumala Logistics for failing to clear a due of Rs 1.25 crore.
About Jindal Saw
Jindal Saw Limited, a flagship company of the PR Jindal Group, is a public company incorporated in 1984 as SAW Pipes Ltd and got its present name in February 2005. The Company is engaged in manufacturing Submerged Arc Welded (SAW) pipes and Spiral pipes for various industrial Sectors.
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