Since early January, creditors’ panel has been waiting for Resolution Professional’s recommendation about bidders.
The committee of creditors set up to evaluate bids for Electrosteel Steels is yet to receive recommendations from the Resolution Professional (RP), sources with direct knowledge of the development said. The delay has led to speculation that there could be a second round of bidding. However, Dhaivat Anjaria, the RP for Electrosteel Steels, has ruled this out. Anjaria, however, did not comment on whether the eligibility of bidders or the due diligence process was a cause behind the delay in making his recommendation. Bids had been received from Vedanta, Edelweiss Alternative Asset Advisors, Tata Steel and Renaissance Steel in early January. The bankers to Electrosteel Steels include State Bank of India, Punjab National Bank, Bank of Baroda and Bank of India among others. The loss-making steel producer was admitted by the Kolkata bench of the National Company Law Tribunal (NCLT) on July 21, 2017 for resolution under the corporate insolvency resolution process. It received bids from the four resolution applicants on January 04, 2018. “The resolution professional is yet to send his recommendation to the bankers. It is possible that the due diligence on the bidders as well as on the bids is taking longer than usual,” one of the sources said on condition of anonymity.
Many of the resolution professionals (RPs) have engaged external consultants to carry out the due diligence on the bidders of the top 11 stressed assets. According to one such consultant, who did not wish to be identified, the due diligence on most of the bidders is still being carried out. However, another source close to the development said the RP is likely to call for a second round of bidding. The RP can call for a second round if the current bids do not meet the prescribed criteria, or if the offers are not considered fair in value.
Electrosteel Steels produces pig iron, billets, TMT bars, wire rods and ductile iron pipes, and has an integrated steel and ductile iron pipe plant in Jharkhand, a part of which is still under construction. In FY17, the company reported a net loss of Rs 1,463.48 crore on revenue of Rs 2,867.83 crore, data from its 2016-17 annual report showed. According to details on the company’s website, the RP has received claims worth Rs 13,570.25 crore from financial creditors, and of these, the RP has admitted claims worth Rs 13,127.45 crore.
By Shamik Paul