Global investment firm Blackstone has expressed interest in investing in loss-making steel producer Monnet Ispat & Energy, which was admitted by the Mumbai bench of the National Company Law Tribunal (NCLT) for insolvency proceedings on July 18, a source close to the development said.
Blackstone has $371 billion of assets under management as of June 30, 2017. The company’s private equity business has $100 billion of assets under management and $37.5 billion available capital to invest, according to data from its website. Sajjan Jindal-led JSW Steel and global private equity firms Oaktree Capital Management and AION Capital have also expressed interest in the company that owns an 1.5 million metric tonne per annum (MMTPA) integrated steel plant in Chhattisgarh, the source confirmed. Monnet Ispat & Energy also owns 7.5 MMTPA coal benefication facilities in Chhattisgarh and Odisha.
As of March 31, 2017, the total debt of Monnet Ispat & Energy was Rs 12,262.48 crore. Financial creditors have claimed Rs 10,359.86 crore as of September 12, and claims worth `10,330.18 crore have been admitted, data from the list of creditors published by the company showed. “The initial interest is very positive from both financial and strategic investors,” the source said. Monnet Ispat & Energy invited expression of interest (EOI) from potential investors last week, and interested resolution applicant have time till September 25 to submit their EOI. After the EOI is received from the resolution applicants, the committee of creditors will shortlist the applicants. The shortlisted applicants will be given access to information on Monnet Ispat & Energy to complete their due diligence. Once their due diligence is done, interested applicants will submit their resolution plans. In the April-June quarter, Monnet Ispat & Energy reported a net loss of Rs 400.06 crore on revenue of Rs 349.44 crore.
In the year-ago quarter, the net loss was Rs 358.73 crore while total revenue stood at Rs 436.29 crore. For the fiscal year ended March 31, 2017, the net loss was Rs 1,733.86 crore on revenue of Rs 1,408.62 crore. In June, the Reserve Bank of India’s Internal Advisory Committee (IAC) had said 12 accounts totalling about 25% of the Rs 8 lakh crore non-performing assets of the Indian banking sector would qualify for immediate reference under the Insolvency and Bankruptcy Code (IBC). Of these, Rs 6 lakh crore are with the state-run banks. Subsequently, Jyoti Structures, Essar Steel, Monnet Ispat and Energy, Alok Industries, Electrosteel Steels, Amtek Auto, Bhushan Steel, Bhushan Power and Steel, ABG Shipyard, Lanco Infratech and Jaypee Infratech have been admitted by the NCLT.