New Delhi: JSW Steel has offered Rs3,700 crore for Monnet Ispat which is undergoing the insolvency resolution proceedings that are expected to be completed by mid-February, sources said.
JSW is a bidder in the resolution proceedings of Monnet Ispat, which owes more than Rs10,000 crore to its lenders. An email query sent to JSW Steel remained unanswered.
“Out of Rs3,700 crore, Rs2,700 crore will be paid as cash to lenders. It would invest Rs1,000 crore as equity which will be used for settling dues of employees and workmen, operational creditors and used for the day-to-day running of the company," said the source requesting anonymity.
The amount offered earlier was Rs3,500 crore but the lenders negotiated and “JSW Steel agreed to add another Rs200 crore", he said.
The last date to submit the plan was 23 December and JSW Steel along with AION Capital is the only firm which has submitted resolution plan, he said.
As per the rules, the entire insolvency process has to end within 270 days. Priority should be 180 days and if not cleared another 90-day time can be sought.
Monnet Ipsat is among the 12 defaulters referred by the Reserve Bank of India (RBI) for insolvency proceedings. Monnet Ispat and Energy Ltd (MIEL), the flagship company of Monnet Group, has a sponge iron unit with a capacity of one lakh tonnes per annum (TPA).
MIEL has an integrated steel plant at Raigarh which has a production capacity of 1.5 MTPA to produce HR (hot rolled) plates, rebars and structure profiles to cater to the rapidly growing infrastructure and construction industry.
Sajjan Jindal-led JSW Steel is in expansion mode. It has plans to raise its capacity to 45 MT by 2030 from 18 MT at present. Besides Monnet Ispat, the top steel maker is also eyeing Bhushan Steel and Bhushan Power and Steel.