Bhagwati Power and Steel, owned by a consortium of Ghanshyam Mishra and Atha Group, is ahead of others in the race to take over ailing Adhunik Alloys and Power (AAPL), the sponge iron maker from Adhunik Group, which went to the National Company Law Tribunal (NCLT) in August last year.
A source in the banking circle said the committee of creditors (CoC) in its meeting held last week has approved the plan of Bhagwati Power & Steel unanimously with a 100% voting. NCLT Kolkata is expected to hear the matter on May 18, where the plan may be presented for the final approval.
Meanwhile, an associate of Srei group, one of the bidders for AAPL, has moved the National Company Law Appellate Tribunal (NCLAT) against its disqualification by the lenders’ group. Only four companies — a Srei Associate, Bhagwati Power, Orissa Metaliks (Rashmi Group) and Edelweiss — had submitted their bids for AAPL.
A banker close to the development said that while the bids of Orissa Metalks and Edelweiss were much lower, the Srei associate was disqualified under Section 29A of the IBC, 2016. “The point raised by the lenders as far as disqualification is concerned is incorrect and has been challenged,” the source in the Srei associate added.
The creditors of AAPL include SBI, Allahabad Bank, ICICI Bank, IFCI and an associate of Srei with SBI as the leading lender. Saddled with a high debt of Rs 750 crore, the unit was operating at less than 50% capacity. It is learnt that Bhagwati Power & Steel has offered a bid of a little over of Rs 325 crore and has been declared the top bidder (H1). Liquidation value of the assets was estimated around Rs 175 crore only.
The consortium of Ghanshyam Mishra Group and Atha Group has iron ore mines in Odisha with an annual capacity of 3.6 million tonne. It has an iron ore mine around 60 kms from the AAPL plant. AAPL has attracted more than 13 expression of interests (EoIs) when the resolution professional (RP) called for the same in November 2017.
AAPL has a turnover of Rs 350 crore. However, sources in the steel industry indicated that with proper management and diversification, the turnover of AAPL can go up to Rs 700 crore. The company has an annual capacity of 2.10 lakh tonne sponge iron along with 1.5 lakh tonne of billet and 30 MW captive power plant. Besides AAPL, some other assets of Adhunik Group, too, have also gone to NCLT that include Adhunik Metaliks and Orissa Manganese and Minerals.