Monnet Ispat is again in the process of selling majority stake and this time JSW Steel, private equity firm – Synergy Capital and global private equity fund Blackstone are in the race for equity in the company.
Monnet Ispat is engaged in coal mining operations, manufacturing coal based sponge iron and various other steel/ iron based products and having its plants at Raipur & Raigarh, Chhattisgarh. The company’s integrated steel plant at Raigarh (Chhattisgarh) has a production capacity of 1.5 MnT pa to produce HR plates, rebars and structure.
The lenders currently hold 53% stake in Monnet Ispat. The stake sale will be through strategic debt restructuring (SDR) route. This is not the first time that Monnet Ispat is using this route to convert debt into equity.
According to sources close to the development, JSW Steel, Synergy Capital and Blackstone were shortlisted investors and final proposals are likely to be submitted by early February. As per sources, the new investor will have a controlling stake in the company. It is also likely that the lenders will be in favour of JSW Steel because of its strategic interest.
What is unclear is whether the existing promoters would retain a minority stake in Monnet. Until September 2016, the promoters held 25.27 percent in the company. “It will be a complex structure and the debt will have to be restructured,” said the source.
BSE has sought clarification from Monnet Ispat regarding the same. However the reply from the company is still awaited.
Financial performance review of Monnet Ispat – Monnet Ispat reported a standalone net loss of INR 358.60 crores in Q1 FY17 and INR 408.94 in Q2 FY17. In 1st half of this fiscal (i.e. Apr-Sept’16) the company’s net loss clocked at INR 767.54 crores.
~Sourced
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