IDBI Bank has rejected a revised offer from Mauritius-based Royal Partner for Essar group arm EPC Constructions after the investor sought a 10 percent discount on its previous offer of Rs 1,150 crore. Royal Partner cited the company’s 'value erosion' during insolvency proceedings as reason for the discount.
"IDBI will not be open to any change in payment consideration (for EPC Constructions)," the lender said in a statement, adding that the resolution process has concluded.
"National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) have directed Royal Partner to implement the plan," the statement said.
IDBI Bank also ruled out the possibility of reconsidering an offer from Arcelor Mittal, who was the second-highest bidder for the Essar group company last year.
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Royal Partner is seeking a discount on grounds that operations have stagnated during the insolvency period as no new contracts were executed, The Economic Times reported.
Responding to the report, Mayur Ghule, Managing Director, RPMG Investment, Royal Partner's parent said, "We cannot comment on the report at this stage as discussions are ongoing in relation to the implementation of the resolution plan."
The Essar group company owes an IDBI Bank-led consortium Rs 7,000 crore. EPC Constructions was the engineering think tank of the Essar group and carried out most of the design and fabrication for steel and power plants.
The dispute over EPC Constructions arose because Royal Partner had assured banks that the cash balance would be transferred to them at the time of the handover of the company, but later proposed that it should be split equally, sources told ET.
"There has been a lag in salary payments. Bonus payout has also been impacted and if the company stays in insolvency longer, it will be harmful for the employees," sources added.
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