JSW Steel makes revised bid of Rs. 1,500 cr to acquire Asian Colour Coated Ispat.

Sajjan Jindal-promoted JSW Steel has revised its bid for Asian Colour Coated Ispat Ltd. by Rs. 300 crore to Rs. 1,500 crore as part of its efforts to acquire the debt-ridden company in an insolvency driven process.

“The secured lenders of the company, led by State Bank of India and Punjab National Bank, are set to vote on the revised bid this weekend,” said a source.

“The lenders had a meeting with the sole bidder, JSW Steel, recently, to negotiate a better deal and managed to convince the company to revise its bid higher.”

NCLT approval

Once approved by the lenders, JSW Steel will be issued a letter of intent and the resolution plan will be placed before the National Company Law Tribunal (NCLT) for final approval.

Earlier, JSW Steel had bid Rs. 1,200 crore including Rs. 800 crore for secured financial creditors and Rs. 400 crore for operational creditors. SBI is the lead lender, with an exposure of Rs. 1,600 crore to Asian Colour. The NCLT had approved the insolvency proceedings against the company last July.

Last month, the company’s Insolvency Resolution Professional (IRP) moved the NCLT, seeking permission to extend the deadline for placing the bid. As per the initial plan, the last date for placing bids was March 8. The NCLT had posted the hearing in the case for May 13.

Deadline extension

“If the lenders vote in favour of JSW Steel’s revised bid, the petition filed by the IRP seeking extension of deadline will become infructuous,” said a lawyer who has been tracking the developments closely.

Asian Colour, which had defaulted on a Rs. 4,900-crore loan, has facilities close to near Delhi and Mumbai. It specialises in downstream, galvanised and colour-coated products that it exports to Europe, Latin America and Africa. It has an annual capacity of 1 million tonne.

It will be JSW Steel’s third successful acquisition through the insolvency driven process if the lenders of Asian Colour vote in its favour. It had earlier acquired Monnet Ispat for Rs. 2,875 crore in a joint venture with Aion Capital.

Though JSW Steel’s bid of Rs. 19,300 crore to acquire Bhushan Power and Steel was approved by the lenders last October, the final approval is delayed due to cases filed by the promoters of Bhushan Power.

HBL