Published: Tue, April 17, 2018
Business | By Tara Barton

Vedanta gets NCLT nod for Electrosteel takeover

Vedanta gets NCLT nod for Electrosteel takeover

By approving Vedanta's resolution plan, the Division Bench comprising Justice Jinan KR and Justice Madan Balachandra Gosavi dismissed the rival bidder Renaissance Steel India's allegation that the company was not an "eligible bidder" for the insolvent steel maker.

Electrosteel is among the first 12 large corporate accounts identified by the Reserve Bank of India for resolution under corporate insolvency resolution process.

According to sources, the resolution plan involved close to Rs 5,300 crore cash payout and a haircut of 60 per cent of the total banks' debt.

Vedanta had announced last month that it had won the bid to acquire bankrupt Electrosteel, trumping competition from Tata Steel Ltd, Renaissance Group and Edelweiss Asset Reconstruction Co Ltd.

Anil Agarwal, chairman of the Vedanta Group told BloombergQuint that the Vedanta Group would look to complete the process of taking over Electrosteel Steels very shortly. Electrosteel Steels owes lenders more than Rs 13,000 crore, of which about Rs 5,000 crore to State Bank of India alone.

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Electrosteel was incorporated in Ranchi as a public company on December 20, 2006, and has been listed on the BSE and NSE since 2010.

Electrosteel operates an integrated steel manufacturing facility near Bokaro, Jharkhand which has a capacity of 1.5 million tonnes per annum. According to an ET report, the Vedanta bid was said to be worth about Rs 4,500 crore, although one person said it might include an additional "sweetener". The remaining 10% of Electrosteel's share capital will be held by Electrosteel's existing shareholders and creditors who received shares in exchange for the debt owed to them.

Vedanta Ltd expects the acquisition to complement its existing iron ore business as the vertical integration of steel manufacturing capabilities has the potential to generate significant efficiencies.

On Monday, Vedanta announced the appointment of Srinivasan Venkatakrishnan of Johannesburg-based AngloGold Ashanti Ltd as chief executive officer effective August 31 this year.

The auction of debt-laden Essar Steel Ltd suffered a setback Wednesday after its.

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