JSW Steel was the sole bidder for the bankrupt company
In what could once again trigger maximisation of value versus sanctity of process debate, the Resolution Professional overseeing insolvency proceedings of Asian Colour Coated Ispat has asked for an extension of the bid submission deadline.
The Resolution Professional, Kuldip Kumar Bassi, has filed a petition with the National Company Law Tribunal, which will hear the same on April 10.
JSW Steel was the sole bidder for the bankrupt company, which specialises in downstream, galvanised and colour coated products. The Sajjan Jindal-led company placed a bid at Rs 1,200 crore on March 8, the last day of the deadline.
But now banks and the RP have approached the Delhi bench of NCLT to extend the deadline, hoping for more bidders. Asian Colour Coated Ispat has a debt of Rs 4,900 crore and banks are hoping to limit the haircut they will be forced to take.
Confirming this development, Bassi said one of the main objectives of the Insolvency & Bankruptcy Code is to maximise value.The processBut officials at JSW Steel are not amused. A senior official said the laid down processes need to be followed as such extension, if it happens after the one-month bid deadline, would be challenged at multiple levels. "Insolvency proceedings at Asian Colour Coated has already surpassed the mandated 270-day resolution window," an official said.
The official highlighted the case of Monnet Ispat, which was acquired by JSW Steel in a similar IBC-led process, despite getting just one bid.
JSW Steel's bid of Rs 1,200 crore, includes Rs 800 crore for secured financial creditors and Rs 400 crore for operational creditors. SBI is the lead lender, with exposure of Rs 1,600 crore to Asian Colour Coated Ispat.
Sources added that if the deadline is extended, private equity majors could place bids. While ArcelorMittal was also said to be interested in the company, it hadn't put in its bid.Asian Colour Coating Ispat has manufacturing facilities close to Delhi and Mumbai, and specialises in downstream, galvanised and colour coated products that it exports to Europe, Latin America and Africa. It has an annual capacity of one million tonne.Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months at 289. Use code FREEDOM.