Mumbai: Monnet Ispat and Energy Ltd on Tuesday said its lenders have approved a resolution plan submitted by a consortium of JSW Steel Ltd and AION Investments Pvt. Ltd.

The deal has to close by 14 April, when the liquidation deadline sets in.

The plan involves upfront payment of Rs2,750 crore to lenders.

The new promoters will also infuse additional equity of Rs389 crore, Rs280 crore in convertible preference shares and additional debt or equity option of Rs200 crore.

JSW Steel will also make a separate working capital advance of Rs125 crore to Monnet Ispat.

AION holds 70% in the consortium while JSW Steel holds the rest.

Monnet was one of the 12 defaulters that the Reserve Bank of India asked banks to refer to the insolvency court last year.

Banks have filed claims of Rs10,359 crore against the company, while operational creditors have submitted claims of another Rs116 crore. By accepting this bid with a majority vote of 99%, the committee of creditors—which includes State Bank of India, Axis Bank, ICICI Bank and Punjab National Bank—is absorbing a haircut of nearly 72% on their loans.

After the deal closes, the consortium will hold 75% stake in Monnet Ispat, lenders 18% and current promoters 3%.

Monnet Ispat owns a 1.5 million tonne integrated steel plant in Raigarh which produces hot-rolled plates, rebars amd structure profiles in addition to a 230 megawatt captive power plant in Chhattisgarh.

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