Billionaire Anil Agarwal-led Vedanta Limited has forayed into steel making by paying ₹5,320 crore to buy out bankrupt Electrosteel Steels under the Insolvency and Bankruptcy Code (IBC), making it the second successful resolution under the Insolvency and Bankruptcy Code.
Last month, Tata Steel had bought bankrupt Bhushan Steel for ₹36,400 crore, making it the first case to achieve resolution among companies whose loan accounts have turned into NPAs for banks.
“Pursuant to the order dated May 30, 2018 of National Company Law Appellate Tribunal (NCLAT), Vedanta Limited is implementing the approved Resolution Plan for Electrosteel Steels Limited. Accordingly, Vedanta Star Limited, a wholly-owned subsidiary..., has deposited the upfront amount of ₹5,320 crore in escrow account of ESL and June 4, 2018 has been determined to be the ‘Effective Date’ under the Resolution Plan,” said a company statement.
‘Board in place’
The company has acquired control over ESL and a new board of directors has been put in place. Investment in ESL would be done through a combination of equity worth ₹1,765 crore and an inter-corporate loan of ₹3,555 crore.
Last week, NCLAT had allowed Vedanta Limited to acquire ESL by depositing the upfront payment to the Committee of Creditors. However, the deal would be subject to the outcome of the petition filed by Renaissance Steel challenging Vedanta’s bid.
