JSW Steel, which had emerged as the lone bidder for Asian Colour Coated Ispat Ltd, has increased its bankruptcy-resolution offer for the stressed steel products maker by 25% to Rs 1,500 crore, a person in the know told VCCircle.
News of the development comes after Asian Colour’s bankruptcy-resolution professional found the previous offer of Rs 1,200 crore unsatisfactory as banks would have to take a haircut of 76% on the Rs 5,000 crore worth of loans made to the stressed steel products maker. The previous offer of Rs 1,200 crore consisted of Rs 800 crore for secured financial creditors and Rs 400 crore for operational creditors. Lead lender State Bank of India has an exposure of around Rs 1,600 crore to Asian Colour.
The National Company Law Tribunal (NCLT) is scheduled to hear the matter next week after the voting on the revised offer, which will probably take place on coming Thursday or Friday, said The Economic Times, which was the first to report the development.
Even after expiry of the 270-day bankruptcy-resolution period on 16 April, the bankruptcy-resolution professional for Asian Colour received fresh interest from TPG Capital, Kotak Mahindra Bank and Blackstone-backed International Asset Reconstruction Company.
Although ArcelorMittal, the world's biggest steelmaker, never made a bid for Asian Colour, it did show initial interest in the firm.The NCLT had approved bankruptcy proceedings against Asian Colour in July last year.
If the resolution plan gets approved, this will be JSW Steel’s third successful distressed asset acquisition under the insolvency process.
JSW group has also bid to acquire Bhushan Power and Steel for Rs 19,300 crore, which was approved by lenders in October last year. However, the final approval is delayed due to some cases filed by the promoters of Bhushan Power.