Monnet Ispat, currently undergoing insolvency proceedings under the Insolvency and Bankruptcy Code (IBC), has received a sole bidding from the JSW group, but lenders have put it under the scanner to check if there is a family connection between promoters of both companies, ET Now quoting sources reported.
Monnet Ispat, one of India’s steel companies, was admitted by the National Company Law Tribunal (NCLT) for insolvency proceedings under the IBC for over Rs 12,000 crore of bad loans after the Reserve Bank of India identified the company for immediate resolution along with 11 others in its first list of bid defaulters.
JSW group is the sole bidder for Monnet Ispat, however, lenders are reported to mulling over seeking legal opinion on whether or not there is a family connection between the promoters of both companies. JSW’s promoter Sajjan Jindal is the brother-in-law of Monnet Ispat’s founder Sandeep Jajodia and lenders want to ensure that the no IBC provisions are flouted.
ET Now reported that the committee of creditors is erring on the side of caution and wants the bid to be consistent with IBC provisions. In the winter session, the parliament passed the Section 29A of the IBC, initially brought in through an ordinance, which barred wilful defaulters, defaulting promoters and related parties among others from the bidding process.
Upon positive legal opinion, the deal with JSW will sail-through, which has offered to pay Rs 3,700 crore for the company. Meanwhile, it was also reported that JSW Steel is also bidding for Bhushan Steel. Tata Steel is also an interested party.
On February 12, Lakshmi Mittal’s ArcelorMittal said that it has put bids for Essar Steel. Numetal Mauritius, in which founders of the Essar group the Ruias are the minority partner — have also bid, while JSW Steel, Tata Steel and JSW did not bid for the company.
On Monday, the RBI ordered an immediate overhaul of the debt-restructuring process, fixing a strict 180-day deadline, failing upon which, lenders will have no choice but to file insolvency proceedings against defaulters. In December, the central bank had identified about 28 other companies for insolvency proceedings.