State Bank of India (SBI) has put on sale loans of Asian Colour Coated Ispat worth Rs 1,301 crore. The bank has sought bids from asset reconstruction companies (ARCs) under the Swiss Challenge method on a full-cash basis, according to a sale document. Asian Colour Coated was named by Reserve Bank of India (RBI) in its second list of 28 defaulters, which banks should refer to the National Company Law Tribunal (NCLT) by December 31, if unresolved.
The Gurgaon-based steelmaker–not listed on the stock exchanges–owes lenders Rs 3,511 crore. It posted a net loss of Rs 549 crore in FY16 on revenues of Rs 6,091 crore, Capitaline data showed. Other lenders to the company include Allahabad Bank, Indian Overseas Bank (IOB), Canara Bank, Union Bank and Bank of Baroda (BoB).
According to a source, SBI will refer the company to the NCLT if the deal is not closed by December 30. The document said that the company has already received a bid of Rs 418.13 crore from a potential investor and, under the Swiss Challenge method, the first bidder will have the right to match the highest bid. “The sale must be closed by making full cash payment on or before December 30, otherwise the sale will be treated as cancelled,” SBI said in its notice.
The bank added that since the sale is on “as is where is basis”, site visits are not envisaged. Last year, lenders to Asian Colour Coated Ispat (ACCIL) had planned a debt recast under RBI’s the scheme for sustainable structuring of stressed assets (S4A). As a first step, they had commissioned a techno-economic viability (TEV) study to check if it qualifies for a recast. It is not clear what the findings of the TEV were, as the lenders did not divulge the same.
Led by R K Aggarwal as chairman and Pradeep Aggarwal as vice-chairman, the company produces cold rolled coils and sheets, galvanised plain coils and sheets, galvanised corrugated sheets and colour coated coils and sheets. ACCIL has a cold rolling mill complex with an installed capacity of 3,00,000 tonnes per annum.