In a recent update on Monnet Ispat and Energy Ltd (MIEL) bankruptcy case, the NCLT (National Company Law Tribunal) has today approved INR 2,875 crore bid for the company submitted by the consortium of JSW Steel – Aion Capital, thus officially giving rights to the consortium to acquire the assets of Monnet Ispat.
The bankrupt Monnet owes over Rs 10,000 crore to the lenders which means that banks and other financial creditors will take a massive 74% haircut as the bid is worth only three-fourths or 26% of the dues.
The plan for Monnet Ispat is approved by NCLT with a modification that the coal mine Gare Palma IV/7 will not be included in the liquidation value of the company as the agreement for the mine had been cancelled by the coal ministry.
According to the reports, the consortium will hold 75% stake in Monnet Ispat and in this consortium, AION Investments Private II Ltd holds 70% stake while JSW Steel owns the remaining.
AION Capital Partners is a joint private equity fund sponsored and run by US-based Apollo Global Management and homegrown PE firm ICICI Venture.
The approval is significant for JSW Steel, which lost out to Tata Steel Ltd for acquiring Bhushan Steel and to ArcelorMittal SA for Italian steelmaker Ilva SpA. JSW is now focused on acquiring smaller steel plants in the domestic market and overseas, a top executive said recently.
Monnet Ispat was one of the dozen large loan defaulters identified by the Reserve Bank of India on its first bankruptcy-resolution list under the Insolvency and Bankruptcy Code (IBC) last year. The other two companies that are handed over to a new management are Bhushan Steel in favour of the Tata Steel and Electrosteel Steels going to the Vedanta group.
Monnet Ispat was started in the year 1994, and has 1.5 MnT integrated steel plant, sponge iron plant, pellet plant, sinter plant and captive power plant in Raigarh, Chhattisgarh. The following table shows configuration MIEL’s pant in Raigarh:
| Unit | Capacity (MnT per annum) |
| Sponge iron unit | 0.70 |
| Blast furnace | 1.00 |
| Ferro alloy plant | 0.075 |
| Electric furnace | 1.74 |
| Rolling mill & Pellet | 1.20 |
| Palletisation plant | 1.20* |
| Sinter plant | 1.50 |
| Coal Beneficiation plant | 1.00 |
| Power plant | 240 MW |
* Proposed capacity enhancement to 2.20 MnT per annum
Source: MIEL
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